House of Commons Culture, Media and Sport Committee Football Governance Follow-Up

Fourth Report of Session 2012–13

Volume II

Additional written evidence

Ordered by the House of Commons to be published 10 and 17 July, and 4 September 2012

Published on 29 January 2013 by authority of the House of Commons London: The Stationery Office Limited

The Culture, Media and Sport Committee

The Culture, Media and Sport Committee is appointed by the House of Commons to examine the expenditure, administration and policy of the Department for Culture, Media and Sport and its associated public bodies.

Current membership

Mr John Whittingdale MP (Conservative, Maldon) (Chair) Mr Ben Bradshaw MP (Labour, Exeter) Angie Bray MP (Conservative, Ealing Central and Acton) Conor Burns MP (Conservative, Bournemouth West) Tracey Crouch MP (Conservative, Chatham and Aylesford) Philip Davies MP (Conservative, Shipley) Paul Farrelly MP (Labour, Newcastle-under-Lyme) Mr John Leech MP (Liberal Democrat, Manchester, Withington) Steve Rotheram MP (Labour, Liverpool, Walton) Mr Adrian Sanders MP (Liberal Democrat, Torbay) Jim Sheridan MP (Labour, Paisley and Renfrewshire North) Mr Gerry Sutcliffe MP (Labour, Bradford South)

The following members were also a member of the committee during the parliament: David Cairns MP (Labour, Inverclyde) Dr Thérèse Coffey MP (Conservative, Suffolk Coastal) Damian Collins MP (Conservative, Folkestone and Hythe) Alan Keen MP (Labour Co-operative, Feltham and Heston) Louise Mensch MP (Conservative, Corby) Mr Adrian Sanders MP (Liberal Democrat, Torbay) Mr Tom Watson MP (Labour, West Bromwich East)

Powers

The committee is one of the departmental select committees, the powers of which are set out in House of Commons Standing Orders, principally in SO No 152. These are available on the internet via www.parliament.uk.

Publication

The Reports and evidence of the Committee are published by The Stationery Office by Order of the House. All publications of the Committee (including press notices) are on the internet at www.parliament.uk/cmscom. A list of Reports of the Committee in the present Parliament is at the back of this volume.

The Reports of the Committee, the formal minutes relating to that report, oral evidence taken and some of the written evidence are available in a printed volume.

Additional written evidence is published on the internet only.

Committee staff

The current staff of the Committee are Elizabeth Flood (Clerk), Grahame Danby (Second Clerk), Kevin Candy (Inquiry Manager), Victoria Butt (Senior Committee Assistant), Keely Bishop (Committee Assistant) and Jessica Bridges-Palmer (Media Officer).

Contacts

All correspondence should be addressed to the Clerk of the Culture, Media and Sport Committee, House of Commons, 7 Millbank, London SW1P 3JA. The telephone number for general enquiries is 020 7219 6188; the Committee’s email address is [email protected]

List of additional written evidence

(published in Volume II on the Committee’s website www.parliament.uk/cmscom)

Page 1 Cardiff City Supporters’ Trust Ev w 1: 2 2 Leeds United Supporters’ Trust Ev w 3 3 Football Club United of Manchester Ev w 4 4 Foxes Trust Ev w 5 5 Mark Jordan Ev w 7 6 Peter Hodge Ev w 9 7 Jonathan Keen Ev w 10 8 RamsTrust Ev w 12 9 Blues Trust (Supporters’ Trust at Birmingham City) Ev w 15 10 Notts County Supporters’ Trust Ev w 16 11 Fulham Supporters’ Trust Ev w 17 12 Reading Football Supporters’ Society Ltd T/A STAR Ev w 23 13 Argyle Fans’ Trust Ev w 24 14 Mariners Trust (Grimsby Town Supporters Trust) Ev w 25 15 Dons Supporters Together Ev w 26 16 R3 Ev w 27 17 Independent Manchester United Supporters’ Association Ev w 29 18 Steve Lawrence Ev w 31 19 Arsenal Supporters’ Trust and Arsenal Fanshare Ev w 33 20 Blake Welton, Editor, First e11even Ev w 34 21 The Football Conference Ev w 35

cobber Pack: U PL: COE1 [SO] Processed: [25-01-2013 11:58] Job: 023143 Unit: PG01 Source: /MILES/PKU/INPUT/023143/023143_w022_023143_w025_michelle_FGF 023 - Football Conference.xml

Culture, Media and Sport Committee: Evidence Ev w1

Written evidence

Written evidence submitted by Cardiff City Supporters’ Trust I am writing to you on behalf of the Cardiff City Supporters’ Trust, a democratic, not-for-profit organisation that aims to represent supporters by way of securing influence at our club. We are part of the Supporters’ Trust movement, which more than 170 members in the UK. Over 300,000 people are members of a Supporters’ Trust in the UK. Our current membership stands at more than 700. As Chair of the Cardiff Trust I would like to express our concern over the potential outcome of your 2011 inquiry into Football Governance. As you will of course be aware, your July report recommended a number of positive reforms, particularly in areas such as a formal licensing model, supporter engagement, unhealthy debt levels, financial instability and increased protection from poor ownership. In October of last year, the Government delivered an endorsement of your proposals, providing a rock-solid mandate for the football authorities to enact lasting change to the way our game operates, both on and off the pitch. Unfortunately, it appears that the Football Association (FA), Premier League and Football League have declined the invitation to do so. In their response, dated 29 February 2012, the authorities acknowledged, “the responsibility we share to grow and protect our sport”, but in the very areas highlighted by your Committee as in need of urgent reform, their proposals are largely undeveloped, and ultimately disappointing. In particular our main concerns are focused on: — The weakness of the football authorities’ proposals for reform of the FA. There is no immediate further reform of the FA Board and their proposals do not address the key issue of its composition. The only change to the council is that the committees will no longer report to them, instead to the Board. No proposals to alter the membership of the FA have been made. — The proposals from the FA on club licensing are very minimal and will not stem the chronic problems of unsustainable debt, loss of assets and failing football clubs. In addition the requirement that any “add-ons” require the approval of the Professional Game Board (PGB) and/or the National Game Board (NGB) is of real concern, as is the responsibility of leagues to develop the content of their own license. Supporters Direct produced a paper outlining a proposed club licensing system that would also include a progressive pathway for increased rights and responsibilities, something which would also largely satisfy the coalition pledge. — The lack of proposals for a solution to provide funding for the long term future of Supporters Direct. We welcomed the Select Committee’s recommendation that “the football authorities must work quickly towards a long term funding solution that allows Supporters Direct to develop its role assisting supporters’ trust organisations and makes realistic assumptions of Supporter Direct’s own fundraising potential.” Equally welcome was the Government response, which stated “the Government believes that a solution to provide funding for the long-term future of Supporters Direct...should not be beyond the skill of the football authorities”. It is hugely disappointing, therefore, that the response from the football authorities shows no recognition for the need for long term funding or realistic assumptions about their fundraising potential. — The delay in convening the proposed Expert Group to address issues that creates barriers to supporter ownership. We welcome the football authorities’ commitment to working with Government to remove legal and bureaucratic hurdles to supporters obtaining ownership interests in their Clubs and to participate in a Government Expert Working Group. Supporters Direct submitted a proposed agenda for the Expert Group to the football authorities and Government in November. We are disappointed that at the time of writing there has been no response from Government on this. — The apparent lack of urgency from Government to ensure that the proposals will deliver on the Coalition pledge “to encourage the reform of football governance rules to support the co- operative ownership of football clubs by their supporters.” The Select Committee report and the Government response led us to believe that this was (and remains) a genuine commitment. The football authorities’ apparent reluctance to fully embrace the spirit of the Select Committee’s recommendations is now putting this commitment to the test. — The proposals for increased supporter engagement are weak, vague requiring significant substantiation to understand exactly what they mean. Many of those who gave evidence during your inquiry highlighted the crucial role that supporters can and have played in the lives of their clubs. The success enjoyed by Swansea City in the Premier League—in part ownership by their supporters’ trust—stands as further proof that supporters have greater significance than as simple consumers, and have earned the right to a structured relationship with their clubs. We would recommend Supporters Direct is called to give evidence when the CMS Select Committee convenes to consider the football authorities’ response. cobber Pack: U PL: COE1 [E] Processed: [25-01-2013 11:58] Job: 023143 Unit: PG01 Source: /MILES/PKU/INPUT/023143/023143_w022_023143_w025_michelle_FGF 023 - Football Conference.xml

Ev w2 Culture, Media and Sport Committee: Evidence

We would urge the Committee to consider closely whether theirs, or Governments’, recommendations have been properly addressed by the football authorities’ proposals as they stand. As outlined above, we believe there is a compelling argument to suggest that they have not. Another missed opportunity to reform our game will surely see the continuation of the current environment of unsustainable spending, unsustainable debt, and the continued marginalisation of football’s most important stakeholders— the supporters. June 2012

Further written evidence submitted by Cardiff City Supporters’ Trust 1. Introduction 1.1 Established in 2008, Cardiff City Supporters Society Limited (the Trust) is a democratic, not-for-profit group of supporters, committed to giving fans a voice in the decision-making process of the club, and to strengthening the links between Cardiff City and the community it serves. 1.2 The Trust shares the concerns of many supporters across the United Kingdom at the way football clubs are owned and managed simply as businesses without proper concern for, or involvement by, the wider social and football community. 1.3 Football is our national game and we forget its roots in communities and its social importance at our peril. Investing in football on a purely business basis, without due consideration of the interests of the fans, is contrary to the belief that football is and should continue to be, a community game which belongs to us all and not simply to the owners of football clubs.

2. Rebranding Cardiff City 2.1 In June 2012 the owners of Cardiff City FC announced they were going to rebrand the club by changing the colour of the home shirts from the traditional blue to red and by creating a new dragon “based” badge instead of the hundred year old “Bluebird.” The club said the changes were an inherent part of a major investment package. Fans saw these as radical moves which could alter the identity of one of Wales’s most historic football clubs. 2.2 These changes were announced without any consultation with fans or supporters’ groups. The Trust conducted a poll of its members. There was a small majority of members against the change from blue to red shirts (54.7%–43.8%) but nine out of ten members said they had not been consulted adequately over the changes, while eight out of ten Trust members said they wanted more information from the club on the investment and rebranding proposals. 2.3 The experience at Cardiff raises questions about the role of supporters in their football clubs when important decisions which directly affect them are made. The Committee’s report (July 2011) and the Government and the football authorities’ responses to it (October 2011 and February 2012) all supported the principle that supporters must be given the opportunity to play a more active role in their clubs. This is based on an understanding that football supporters are not like customers or consumers in any other “normal” business.

3. The Lesson for Football 3.1 The Committee’s report supported the introduction of structured consultation with fans through supporters’ trusts. Supporter involvement is not just about ownership. There are a number of examples of effective consultation with fans. These include Arsenal, Sunderland and a new approach from Liverpool with the Liverpool Football Club Supporters Committee. We welcome these approaches to consultation with supporters in a more structured format, and urge other clubs to follow suit. (Par.222) 3.2 The Government’s response supported such a move, but went further, …the Government urges the football authorities to consider ways to actively encourage and incentivise methods of including supporter representatives on the Boards of clubs. We see the value in the views of many supporters that such representatives should have a full role within the club Board... Whatever the way that representation is achieved, we believe that there is every reason to think that clubs are stronger because they have supporters at the heart of the club, not weaker. (Par. 40) 3.3 The recent Cardiff example has resonance for all football clubs in England and Wales. Supporters appear to have been treated solely as paying customers who have no real ownership of the club which many have supported for years. Far reaching changes appear to be able to be foisted upon supporters for apparent “business” reasons without proper explanation or discussion. 3.4 The Trust welcomes the football authorities’ support for the principles of supporter consultation: “Club’s interests are best served through having effective working relationships with its supporters.” (Page 11) It also cobber Pack: U PL: COE1 [O] Processed: [25-01-2013 11:58] Job: 023143 Unit: PG01 Source: /MILES/PKU/INPUT/023143/023143_w022_023143_w025_michelle_FGF 023 - Football Conference.xml

Culture, Media and Sport Committee: Evidence Ev w3

welcomes the creation of Club Forums and Supporter Liaison Officers and the requirement that leagues review which decisions should require league approval and which should be the subject of consultation by clubs with fans.

4. Recommendation 4.1 In the same way that the relocation of a football club would be considered by the football authorities to be a decision subject to league approval following consultation, the Trust believes that any changes to the name of a club, a change of a club’s home colours and any major redesign of the logo or crest of a club should constitute a major change and should be treated in a similar way. Such decisions should automatically be the subject of such a structured and formal consultation. It is not enough to allow leagues themselves to decide what constitutes decisions of major importance to supporters. 4.2 In order to ensure compliance by clubs, these requirements for specified major changes (including but not limited to name, colour and badge changes) should be a part of the football authorities’ new licensing framework. Any changes implemented by a club without formal consultation should be considered a breach of the licence. 4.3 The Trust welcomes the opportunity to repeat the call it made in its submission to the Committee’s original inquiry that supporters’ trusts should have formal representation on the boards of professional football clubs, even if this is simply in an “observer” capacity and that fans issues should become a permanent agenda item at all clubs’ board meetings. July 2012

Written evidence submitted by the Leeds United Supporters’ Trust I am writing to you on behalf of the Leeds United Supporters’ Trust, a democratic, not-for-profit organisation that aims to represent supporters of Leeds United, by way of securing influence at our club. We are part of the Supporters’ Trust movement, which has over 170 members in the UK. Over 300,000 people are members of a Supporters’ Trust in the UK. Our current membership stands at 6094. I am writing to you in order to express our concern over the potential outcome of your 2011 inquiry into Football Governance. As you will of course be aware, your July report recommended a number of positive reforms, particularly in areas such as a formal licensing model, supporter engagement, unhealthy debt levels, financial instability and increased protection from poor ownership. In October of last year, the Government delivered an endorsement of your proposals, providing a rock-solid mandate for the football authorities to enact lasting change to the way our game operates, both on and off the pitch. Unfortunately, it appears that the Football Association (FA), Premier League and Football League have declined the invitation to do so. In their response, dated 29 February 2012, the authorities acknowledged, “the responsibility we share to grow and protect our sport”, but in the very areas highlighted by your Committee as in need of urgent reform, their proposals are largely undeveloped, and ultimately disappointing. In particular our main concerns are focused on: — The weakness of the football authorities’ proposals for reform of the FA. There is no immediate further reform of the FA Board and their proposals do not address the key issue of its composition. The only change to the council is that the committees will no longer report to them, instead to the Board. No proposals to alter the membership of the FA have been made. — The proposals from the FA on club licensing are very minimal and will not stem the chronic problems of unsustainable debt, loss of assets and failing football clubs. In addition the requirement that any “add-ons” require the approval of the Professional Game Board (PGB) and/or the National Game Board (NGB) is of real concern, as is the responsibility of leagues to develop the content of their own license. Supporters Direct produced a paper outlining a proposed club licensing system that would also include a progressive pathway for increased rights and responsibilities, something which would also largely satisfy the coalition pledge. — The lack of proposals for a solution to provide funding for the long term future of Supporters Direct. We welcomed the Select Committee’s recommendation that “the football authorities must work quickly towards a long term funding solution that allows Supporters Direct to develop its role assisting supporters’ trust organisations and makes realistic assumptions of Supporter Direct’s own fundraising potential.” Equally welcome was the Government response, which stated “the Government believes that a solution to provide funding for the long-term future of Supporters Direct ... should not be beyond the skill of the football authorities”. It is hugely disappointing, therefore, that the response from the football authorities shows no recognition for the need for long term funding or realistic assumptions about their fundraising potential. cobber Pack: U PL: COE1 [E] Processed: [25-01-2013 11:58] Job: 023143 Unit: PG01 Source: /MILES/PKU/INPUT/023143/023143_w022_023143_w025_michelle_FGF 023 - Football Conference.xml

Ev w4 Culture, Media and Sport Committee: Evidence

— The delay in convening the proposed Expert Group to address issues that creates barriers to supporter ownership. We welcome the football authorities’ commitment to working with Government to remove legal and bureaucratic hurdles to supporters obtaining ownership interests in their Clubs and to participate in a Government Expert Working Group. Supporters Direct submitted a proposed agenda for the Expert Group to the football authorities and Government in November. We are disappointed that at the time of writing there has been no response from Government on this. — The apparent lack of urgency from Government to ensure that the proposals will deliver on the Coalition pledge “to encourage the reform of football governance rules to support the co- operative ownership of football clubs by their supporters.” The Select Committee report and the Government response led us to believe that this was (and remains) a genuine commitment. The football authorities’ apparent reluctance to fully embrace the spirit of the Select Committee’s recommendations is now putting this commitment to the test. — The proposals for increased supporter engagement are weak, vague requiring significant substantiation to understand exactly what they mean. Many of those who gave evidence during your inquiry highlighted the crucial role that supporters can and have played in the lives of their clubs. The success enjoyed by Swansea City in the Premier League—in part ownership by their supporters’ trust—stands as further proof that supporters have greater significance than as simple consumers, and have earned the right to a structured relationship with their clubs. We would recommend Supporters Direct is called to give evidence when the CMS Select Committee convenes to consider the football authorities’ response. We would urge the Committee to consider closely whether theirs, or Governments’, recommendations have been properly addressed by the football authorities’ proposals as they stand. As outlined above, we believe there is a compelling argument to suggest that they have not. Another missed opportunity to reform our game will surely see the continuation of the current environment of unsustainable spending, unsustainable debt, and the continued marginalisation of football’s most important stakeholders— the supporters. June 2012

Written evidence submitted by Football Club United of Manchester I am writing to you on behalf of FC United of Manchester, a democratic, not-for-profit organisation that is 100% owned by its members (supporters). We are part of the Supporters’ Trust movement, which has over 170 members in the UK. Over 300,000 people are members of a Supporters’ Trust in the UK. Our current membership stands at 2,839. Our headline achievements to date include: — Raising more than £1.6 million via a Community Share issue, from our supporters and people who believe in investing for community benefit, towards a 5,000 capacity football stadium and community facilities. — Raising more than a further £500,000 by donations and fund-raising activities towards the stadium. — Averaging a crowd of 2,000 while playing non league football at three levels below the Football League. — Three promotions during our seven year existence. I am writing to you in order to express our concern over the potential outcome of your 2011 inquiry into Football Governance. As you will of course be aware, your July report recommended a number of positive reforms, particularly in areas such as a formal licensing model, supporter engagement, unhealthy debt levels, financial instability and increased protection from poor ownership. In October of last year, the Government delivered an endorsement of your proposals, providing a rock-solid mandate for the football authorities to enact lasting change to the way our game operates, both on and off the pitch. Unfortunately, it appears that the Football Association (FA), Premier League and Football League have declined the invitation to do so. In their response, dated 29 February 2012, the authorities acknowledged, “the responsibility we share to grow and protect our sport”, but in the very areas highlighted by your Committee as in need of urgent reform, their proposals are largely undeveloped, and ultimately disappointing. In particular our main concerns are focused on: — The weakness of the football authorities’ proposals for reform of the FA. There is no immediate further reform of the FA Board and their proposals do not address the key issue of its composition. The only change to the council is that the committees will no longer report to them, instead to the Board. No proposals to alter the membership of the FA have been made. cobber Pack: U PL: COE1 [O] Processed: [25-01-2013 11:58] Job: 023143 Unit: PG01 Source: /MILES/PKU/INPUT/023143/023143_w022_023143_w025_michelle_FGF 023 - Football Conference.xml

Culture, Media and Sport Committee: Evidence Ev w5

— The proposals from the FA on club licensing are very minimal and will not stem the chronic problems of unsustainable debt, loss of assets and failing football clubs. In addition, the requirement that any “add-ons” require the approval of the Professional Game Board (PGB) and/or the National Game Board (NGB) is of real concern, as is the responsibility of leagues to develop the content of their own licence. Supporters Direct produced a paper outlining a proposed club licensing system that would also include a progressive pathway for increased rights and responsibilities, something which would also largely satisfy the coalition pledge. — The lack of proposals for a solution to provide funding for the long term future of Supporters Direct. We welcomed the Select Committee’s recommendation that “the football authorities must work quickly towards a long term funding solution that allows Supporters Direct to develop its role assisting supporters’ trust organisations and makes realistic assumptions of Supporter Direct’s own fundraising potential.” Equally welcome was the Government response, which stated “the Government believes that a solution to provide funding for the long-term future of Supporters Direct...should not be beyond the skill of the football authorities”. It is hugely disappointing, therefore, that the response from the football authorities shows no recognition for the need for long term funding or realistic assumptions about their fundraising potential. — The delay in convening the proposed Expert Group to address issues that creates barriers to supporter ownership. We welcome the football authorities’ commitment to working with Government to remove legal and bureaucratic hurdles to supporters obtaining ownership interests in their Clubs and to participate in a Government Expert Working Group. Supporters Direct submitted a proposed agenda for the Expert Group to the football authorities and Government in November. We are disappointed that at the time of writing there has been no response from Government on this. — The apparent lack of urgency from Government to ensure that the proposals will deliver on the Coalition pledge “to encourage the reform of football governance rules to support the co- operative ownership of football clubs by their supporters.” The Select Committee report and the Government response led us to believe that this was (and remains) a genuine commitment. The football authorities’ apparent reluctance to fully embrace the spirit of the Select Committee’s recommendations is now putting this commitment to the test. — The proposals for increased supporter engagement are weak, vague and requiring significant substantiation to understand exactly what they mean. Many of those who gave evidence during your inquiry highlighted the crucial role that supporters can and have played in the lives of their clubs. The success enjoyed by Swansea City in the Premier League—in part ownership by their supporters’ trust—stands as further proof that supporters have greater significance than as simple consumers, and have earned the right to a structured relationship with their clubs. We would recommend Supporters Direct is called to give evidence when the CMS Select Committee convenes to consider the football authorities’ response. We would urge the Committee to consider closely whether theirs, and Government’s, recommendations have been properly addressed by the football authorities’ proposals as they stand. As outlined above, we believe there is a compelling argument to suggest that they have not. Another missed opportunity to reform our game will surely see the continuation of the current environment of unsustainable spending, unsustainable debt, and the continued marginalisation of football’s most important stakeholders— the supporters. June 2012

Written evidence submitted by the Foxes Trust I am writing to you on behalf of the Foxes Trust, the Supporters’ Trust for Leicester City Football club, a democratic, not-for-profit organisation that aims to represent supporters of Leicester City. We are part of the Supporters Trust movement, which has over 170 members in the UK. Over 300,000 people are members of a Supporters Trust in the UK. Amongst other achievements, the Foxes Trust was pivotal in ensuring the survival of Leicester City following the club going into Administration in 2002. I am writing to you in order to express our concern over the potential outcome of your 2011 inquiry into Football Governance. As you will of course be aware, your July report recommended a number of positive reforms, particularly in areas such as a formal licensing model, supporter engagement, the removal of unhealthy debt levels, financial instability and increased protection from poor ownership. In October of last year, the Government delivered an endorsement of your proposals, providing a mandate for the football authorities to enact lasting change to the way our game operates, both on and off the pitch. Unfortunately, it appears that the Football Association (FA), Premier League and Football League have declined the invitation to do so. cobber Pack: U PL: COE1 [E] Processed: [25-01-2013 11:58] Job: 023143 Unit: PG01 Source: /MILES/PKU/INPUT/023143/023143_w022_023143_w025_michelle_FGF 023 - Football Conference.xml

Ev w6 Culture, Media and Sport Committee: Evidence

In their response, dated 29 February 2012, the authorities acknowledged, “the responsibility we share to grow and protect our sport”, but in the very areas highlighted by your Committee as in need of urgent reform, their proposals are largely undeveloped, and ultimately disappointing.

In particular our main concerns are focused on: — The weakness of the football authorities’ proposals for reform of the FA. There is no further immediate reform of the FA Board and their proposals do not address the key issue of its composition. The only change to the council is that the committees will no longer report to them, instead to the Board. No proposals to alter the membership of the FA have been made. — The proposals from the FA on club licensing are minimal and will not stem the chronic problems of unsustainable debt, loss of assets and failing football clubs. In addition the requirement that any “add-ons” require the approval of the Professional Game Board (PGB) and/or the National Game Board (NGB) is of real concern, as is the responsibility of leagues to develop the content of their own license. Supporters Direct produced a paper outlining a proposed club licensing system that would also include a progressive pathway for increased rights and responsibilities, something which would also largely satisfy the coalition pledge. — The apparent lack of urgency from Government to ensure that the proposals will deliver on the Coalition pledge “to encourage the reform of football governance rules to support the co- operative ownership of football clubs by their supporters.” The Select Committee report and the Government response led us to believe that this was (and remains) a genuine commitment. The football authorities’ apparent reluctance to fully embrace the spirit of the Select Committee’s recommendations is now putting this commitment to the test. — The lack of proposals for a solution to provide funding for the long term future of Supporters Direct. We welcomed the Select Committee’s recommendation that “the football authorities must work quickly towards a long term funding solution that allows Supporters Direct to develop its role assisting supporters’ trust organisations and makes realistic assumptions of Supporters Direct’s own fundraising potential.” Equally welcome was the Government response, which stated “the Government believes that a solution to provide funding for the long- term future of Supporters Direct ... should not be beyond the skill of the football authorities”. It is hugely disappointing, therefore, that the response from the football authorities shows no recognition for the need for long term funding or realistic assumptions about their fundraising potential. — The delay in convening the proposed Expert Group to address issues that create barriers to supporter ownership. We welcome the football authorities’ commitment to working with Government to remove legal and bureaucratic hurdles to supporters obtaining ownership interests in their Clubs, and to participate in a Government Expert Working Group. Supporters Direct submitted a proposed agenda for the Expert Group to the football authorities and Government in November. We are disappointed that at the time of writing there has been no response from Government on this. — The proposals for increased supporter engagement are weak and vague, requiring significant substantiation to understand exactly what they mean. Many of those who gave evidence during your inquiry highlighted the crucial role that supporters can and have played in the lives of their clubs. The success enjoyed by Swansea City in the Premier League—in part owned by their Supporters’ Trust—stands as further proof that supporters have greater significance than as simple consumers, and have earned the right to a structured relationship with their clubs.

Our Recommendations

We would recommend Supporters Direct is called to give evidence when the CMS Select Committee convenes to consider the football authorities’ response.

We would urge the Committee to consider closely whether its recommendations, and the Government’s, have been properly addressed by the football authorities’ proposals as they stand.

As outlined above, we believe there is a compelling argument to suggest that they have not. Another missed opportunity to reform our game will surely see the continuation of the current environment of unsustainable spending, unsustainable debt, and the continued marginalisation of football’s most important stakeholders— the supporters.

We would be very pleased to understand further how your Committee intends to take these and related matter forwards. June 2012 cobber Pack: U PL: COE1 [O] Processed: [25-01-2013 11:58] Job: 023143 Unit: PG01 Source: /MILES/PKU/INPUT/023143/023143_w022_023143_w025_michelle_FGF 023 - Football Conference.xml

Culture, Media and Sport Committee: Evidence Ev w7

Written evidence submitted by Mark Jordan

I submit the following evidence to the enquiry which I feel is relevant. I am aware of other previous information and submissions which I have accounted for and at times have referenced.

Name: Mark Jordan, aged 50: — Leeds United season ticket holder for both home and away matches. — Presently secretary of Leeds United’s official “Blackpool Whites” regional members club, which organises transport and tickets for fans living in and around the area. — I am a member of the Football Supporters’ Federation and have been involved with the Leeds Supporters Trust for around six years. — Previously been secretary (1980–93) of Leeds United local supporters club (an independent organisation). — I am a self employed gas safe registered heating engineer.

Background As a lifelong and serial supporter of my club having purchased my first season ticket in 1979 I am aware of the problems that fans face, and am now acutely aware of the consequences of poor governance within football as our club has suffered more than most over the last decade.

At Leeds United our problems have been well documented although I think our club has been lucky to survive and return to its present position, however I believe that we still have some way to go before making a complete recovery. Like all fans I would like someone to spend millions on the club to get us back into the Premier League (PL), but which I think is a fundamental problem within the game as fan pressure drives the club directors into talking chances with finance.

Disparity and Effect of Sky Monies The big problem that is affecting the game in my view is the enormous amount of money available for clubs in the Premier League, where a club with relatively few fans can dwarf the better supported clubs lower down the leagues in terms of finance.

Leeds United generates around £800k per game which doesn’t compare favourable at all to the £40 million once PL promotion has been secured, so has to either generate its own additional income or have someone inject huge amounts to compete.

The problem is exacerbated by cash rich clubs dropping down from the PL and other clubs taking chances by offering contracts that they really can’t afford. This has demonstrated recently by Portsmouth who’ve had to enter a second administration despite signing on many players last summer on sizeable contracts.

Its my opinion that until some of the huge amounts of money are shared around more equally that we’ll always have the problems I’ve listed above, as the competition is unfair and self serving for the clubs who prosper the longest in the Premier League.

I also believe that the many businessmen who get involved with football haven’t the ability to deal with multi million pound deals and subsequent finance, as Leeds United found with the board led by Peter Risdale who were quite frankly out of their depth.

Fans Groups and Trust Involvement I believe that fan involvement is important but not that critical where the bigger clubs are involved, given the huge amounts of money that exist within the very top of the game. The Trust at Manchester United are one of the biggest in the world, but it would be impossible I feel for them to be able to comprehend the significance of major financial decisions made within that club.

At Leeds United we’re fortunate at the moment that our club does have an annual fans conference where we can have our input, in a days debate where views and suggestions can be made. For this season the club have already implemented improvements that we’ve suggested which I believe is unique in this country. I am not aware of any other club having such a thing in place where—in our case—the conference was chaired by Leeds United’s own chief executive.

Having said that our own Chairman/board had a very difficult decision to make previously where we had to put into administration, as the effects of the previous owners caught up with us and we simply ran out of money. It’s worth noting here however that Ken Bates “ringfenced” our season ticket sales for the forthcoming season so ordinary fans wouldn’t be affected. cobber Pack: U PL: COE1 [E] Processed: [25-01-2013 11:58] Job: 023143 Unit: PG01 Source: /MILES/PKU/INPUT/023143/023143_w022_023143_w025_michelle_FGF 023 - Football Conference.xml

Ev w8 Culture, Media and Sport Committee: Evidence

Supporters Direct (SD) As stated above I have been a member (via our Trust) of the national organisation but I feel their constitution and ways of operating aren’t condusive to fair and accurate representation. I’ve previously had a complaint which I was informed would be dealt with but providing I deposited a sum of £500, which would be returned if my complaint was upheld. It seemed unfair that they themselves would be dealing with the complaint and that I therefore ran a higher risk of losing that money, which equates to the cost of a season ticket and is of no insignificant value. I also feel that geographically the operating center of SD (ie London) hinders national representation and subsequent involvement, where a more central location would be beneficial to football fans all over the country. The appointment of the SDs own executive members seems to be an issue too. Previously there was a David Boyle who made disparaging remarks to Peter Winkleman (owner MKD) and who then had to resign, but where Mr Boyle had been severely critical of how Football League Chairmen conducted themselves yet couldn’t conduct himself in an appropriate manner at a critical time. They’ve now appointed the former chief executive of Portsmouth FC (David Lampitt) who have taken a second recent administration and where Mr Lampitt had been responsible. If you recall from my earlier evidence above Portsmouth had previously signed players on where they clearly couldn’t afford those contracts which were sanctioned by Mr Lampitt. At present I don’t feel that Supporters Direct truly represents all fans as it doesn’t engage a reasonable cross section, and seems to be more interested in its own perception within the game rather getting “the job done”.

Football Supporters Federation (FSF) The FSF consists of several regional groups one of which is based in Yorkshire. At the previous submissions the Yks FSF made a malicious and vexatious assessment of how Leeds United was governed, which I feel was based on the word of mouth from a group of disaffected Leeds United fans—I don’t think the true views of Leeds fans (at the time) were represented. What might have been more helpful would be for the FSF to have canvassed the clubs official groups which is in the tens of thousands, rather than a small and spiteful group who had an agenda. At the subsequent meeting to accrue information for the subsequent submission, Malcolm Clarke the FSF national Chair was in attendance which I find most worrying given biased evidence that was submitted. At later FSF Yks meetings I had submitted improvements for fans but these were neither discussed at meetings nor minuted, which both Malcolm Clarke and Alan Bloor (FSF Yks director) have admitted in subsequent emails. I find this lack of respect for democracy most worrying and therefore I think the integrity of this group must be called into question. I am of the opinion that the independent Leeds United Supporters Club who hold dual office with the FSF, are using the FSF as a vehicle to avenge Ken Bates’ decision to remove their preferential away ticket allocation and impose the clubs own members club—where one of their group has since been elected to the national FSF body, which makes them implicit in what’s being going on.

Leeds Supporters Trust Our own Trust has evolved recently after electing a new Chairman who has sought to make it more representative of Leeds United fans, after it had been run by people who were involved heavily with our independent supporters club with their own personal agenda. At present I am unable to use some of its social networking sites after being banned without fair reason nor means of appeal (which both SD and the FSF are aware of) but this shouldn’t detract from the main improvements its new Chairman trying to implement. However I believe that by and large it doesn’t represent the majority of Leeds United fans and like the other groups above, hasn’t sought to gain consensus and a proper mandate from the fans-so it would be unfair to have them as our legal representatives of our fanbase if the Parliamentary Committee decide to invoke such a thing. At present the clubs own official Regional Members Club has around 60 branches and over 10,000 members, so they along with our season ticket base provide a far greater number of Leeds fans who have input-this may be the same with other clubs across the country. Last summer when Damian Collins MP made a statement to a sub committee where he referenced statements from our Trust, they at the time only had around 300 or so members, yet here we had an important speech being supported by only a handful of Leeds United fans which I thought was wrong in principle. In my view Trusts should be forced to have a cross section of all fans within its constitution and there should be stricter rules in place for complaints and appeals etc. cobber Pack: U PL: COE1 [O] Processed: [25-01-2013 11:58] Job: 023143 Unit: PG01 Source: /MILES/PKU/INPUT/023143/023143_w022_023143_w025_michelle_FGF 023 - Football Conference.xml

Culture, Media and Sport Committee: Evidence Ev w9

In Closing I think that overall there should be more external regulation on how clubs are run, but after several court adjudications it seems the courts aren’t supporting the government, specifically with reference to the “preferred creditors rule”. That and other issues are making football too expensive for the average football fan, who by and large is being let down by the many national fans groups and their committees. I would guard against given a free rein to fans groups until they are more accountable and fairer in their democratic makeup, where certain sections of fans have specific self serving agendas. I am willing to attend any enquiry and offer oral evidence and would willingly pay my own expenses. June 2012

Written evidence submitted by Peter Hodge Summary — I am writing as invited in your email dated 19 June 2012 and further to my previous submission of 5 January 2010 that was included in the Committee’s report, additional written evidence number 21. (For ease of reference, my previous submission is attached to this submission as Appendix 1).1 — This further submission is sent in a personal capacity as a football supporter for over 50 years. — The submission is a brief one on my key concern of lack of competitiveness, particularly in the top two tiers of English football. It comments on: (a) The joint response of the Football Association, Premier League, Football League and National Game to the Select Committee’s report. (b) Relevant developments since early 2010.

Submission 1. I appreciate that much work has gone into the report and the responses. However, my fundamental concern remains. This concern relates to the lack of competitiveness of the professional game, particularly in the top two tiers. Indeed, in some respects my concern has increased because: (a) The issue is not addressed in the joint response of the Football Association, Premier League, Football League and National Game to the Select Committee’s report. (b) There have in the last 18 months been a number of significant developments that will reduce rather than increase competitiveness. 2. In my initial submission (attached at Appendix 1 for ease of reference)2 I listed the following as the key differentials leading to the current uncompetitive position: 2.1 Home teams keep all the gate money. 2.2 Television and prize money far greater in Premier League than elsewhere. Big differences between top end and bottom end teams in Premier League. 2.3 Bigger teams capture most talented youth. 2.4 Club governance and ownership with “money to burn”. 3. My conclusions with regard to addressing this problem were as follows: 3.1 The unregulated, free market, commercially-driven philosophy adopted by the Premier League has resulted in unacceptable differences in wealth between clubs to the point where the game is no longer competitive. 3.2 In order to restore competitiveness, the philosophy needs to change to a more egalitarian one in which resources are much more evenly distributed. 3.3 A much better balance needs to be struck between the key interrelated variables that determine the quality of the team on the pitch and thus its success or otherwise. 3.4 This work should be undertaken by the game’s governing bodies. 4. In the joint response of the Football Association, Premier League, Football League and National Game to the Select Committee’s report, none of these issues is addressed. 5. Since my submission was written, there have been a number of developments which I believe will exacerbate the situation: 5.1 The Financial Fair Play Rules may help football to be run on a more stable basis. However, in the absence of other key changes, they will not increase competitiveness. Indeed, they may simply produce a largely unvarying “pecking order” of clubs, based upon matchday and television income. 1 Not printed. 2 Not printed. cobber Pack: U PL: COE1 [E] Processed: [25-01-2013 11:58] Job: 023143 Unit: PG01 Source: /MILES/PKU/INPUT/023143/023143_w022_023143_w025_michelle_FGF 023 - Football Conference.xml

Ev w10 Culture, Media and Sport Committee: Evidence

5.2 The new rules on youth development may help the England team. However, if I have understood them correctly, they will make the top leagues even more uncompetitive. My understanding is that any youth player who slips through the initial “drag net” or who develops late can be “hoovered up” by the bigger teams with little by way of compensation to the losing team. 5.3 The new Premier League television deal of over £3 billion, an increase of some £1.25 billion on the current contract. 5.4 The increased parachute payments to teams relegated from the Premier League creates a differential at second tier. 6. In conclusion, it appears that, rather than becoming more competitive, football is set to become much less so. I believe this is a depressing outlook for all but a handful of teams in the upper echelons of the Premier League as it leaves little for a far greater number of teams to hope for or aspire to. June 2012

Written evidence submitted by Jonathan Keen This additional evidence is submitted by Jonathan George Keen, supporter of Reading Football Club since 1976. Although I am a member of football supporters’ organisations, this evidence is submitted wholly on my own behalf and in my own name. This additional evidence is submitted in response to the Committee’s invitation for additional written evidence submissions which specifically address the football authorities’ proposals for governance reform, issued on 19 June 2012.

Summary of Evidence (i) The football authorities’ proposals for governance reform are wholly inadequate since over significant areas of the game there is no provision for any independent or external oversight or “second-tier” of governance. This is essential to protect supporters, their interests, and the long-term good of the game. (ii) Any such self-regulation, as proposed by the football authorities, inevitably means that short-term commercial or vested interests conflict with the longer-term interests of supporters or the game itself. (iii) The framework of self-regulation proposed by the football authorities brings clear and inevitable parallels with the UK press and banking industries. Both of these industries have relied on either light-touch or self-regulation, which has proven to be ineffective in both, with short-term greed or vested interests putting at risk the whole structure and integrity of those industries. (iv) Controls on club owners, their intentions and conduct are insufficient and must be strengthened and properly enforced, and these factors are not sufficiently covered in football authorities’ proposals. Recent events at Reading Football Club demonstrate very clearly the inadequacy of these controls. (v) The football authorities’ proposals for supporter participation fall short of being useful, and the role of Supporter Liaison Officer as proposed is flawed. (vi) With modifications and funding, the Supporter Liaison Officer does offer some scope, but it needs to be made truly independent of clubs, truly representative of supporters and appointed by them, and must be properly funded. (vii) Similarly, funding must be provided for national supporters’ organisations. This is easily achievable through a small levy on tickets prices or TV revenue.

Detailed Evidence 1. In this additional evidence, I will comment primarily on the model of responsibilities outlined within the football authorities’ proposals, since these are the areas about which I have the greatest concern. 2. This model of responsibility specifies that the are a number of “Matters outside [the] scope of [the] FA”, which are to be dealt with by “County FAs, Clubs, and Leagues as appropriate”. Example of such matters specified are: — County FA, Club, and League commercial and financial matters; — club business and operating issues, — stadium, customer/fan issues; — club/league relationship with other competition organisers eg UEFA, either individually or through ECA, EPFL; — club ticket prices; and — club distribution and parachute payments. 3. Whilst some of these matters are clearly the responsibility of the appropriate County FAs, Clubs or Leagues, it is of grave concern to me that in all of these areas those deemed responsible are apparently being cobber Pack: U PL: COE1 [O] Processed: [25-01-2013 11:58] Job: 023143 Unit: PG01 Source: /MILES/PKU/INPUT/023143/023143_w022_023143_w025_michelle_FGF 023 - Football Conference.xml

Culture, Media and Sport Committee: Evidence Ev w11

given full and unrestricted responsibility, with no external oversight or governance. This amounts to total, unequivocal self-regulation with full jurisdiction over those areas. 4. This is a change from the current situation, whereby the Football Association assumes overall responsibility for all aspect of governance of the game, acting as a higher level of authority than the County FAs, Clubs or Leagues themselves, acting as “guardian of the game”. Although less than perfect, the Football Association is at least currently there as a higher level of authority, able to prevent any commercially-driven excesses which might change the nature of the game or disadvantage its stakeholders. 5. This delegation of full power, with no external regulation or oversight from any other body is surely the worst possible of all governance models. Delegation of full authority on a self-regulation basis to any body of a primarily commercial nature (such as a professional league) inevitably endangers the rights and interest of consumers and other stakeholders, since short-term commercial interests will inevitably conflict with longer- term or consumer interests. 6. In the case of football, this means that the proposed delegation to clubs, leagues etc of full authority over key issues relevant to supporters (eg stadium, customer/fan issues and ticket prices) will significantly damage the interests of supporters, who are key stakeholders in the game. 7. This model of responsibilities would effectively leave supporters and other stakeholders with no effective right of appeal and leave these areas with no outside independent or higher-level governance or oversight. In my view it is absolutely critical that there must be some level of higher authority providing independent oversight. This is a basic principle which should apply in any industry, let alone in one so much a part of our culture and heritage and of such importance in so many ways to so many of its stakeholders. 8. The football authorities’ proposals to delegate total authority over these matters will be functionally equivalent to allowing a privatised industry to exist with no external regulator—an unthinkable state of affairs as it provides no degree of consumer protection. The football authorities’ proposals offer exactly the same degree of consumer protection—precisely zero—and so consumers would be dependent upon the integrity and fair-mindedness of commercial organisations. This is an extremely bleak outlook. 9. Although there is an Independent Football Ombudsman (IFO) service, this has proven to be of minimal benefit to supporters. It is funded by the football industry and—crucially—its judgements are only advisory rather than binding, and so are frequently ignored by clubs and football authorities. It certainly is neither structured nor staffed to be the higher authority providing independent oversight which is required. Whilst the football authorities do propose widening the remit of the IFO to include liaison with supporter groups, it is clear that his role will still be advisory only, consisting of little more than “publishing findings”. 10. In many ways, the proposed delegation of powers to leagues and clubs, allowing them to self-regulate, mimics the lack of external regulation which has been applied to the UK press and banking industries over the past two decades. Everyone, especially within DCMS, is familiar with the excesses of these industries, resulting from a combination of greed, lack of individual integrity and absence of external regulation. The football authorities’ proposals are for an almost identical absence of external regulation, and I see no reason why the other two factors would not also flourish in an unregulated football industry. 11. I am deeply concerned that the football authorities’ proposals for club licensing do nothing effective to address the problem of external owners who may be irresponsible or unscrupulous, or to provide football clubs with legal status which recognises and values their place in the community and their cultural importance, and which prevents them being valued in purely financial terms. Nor do they provide anything to ensure that supporters and other stakeholders will have sufficient transparency of the ownership and management of the club they support. 12. An example of this, showing the potential dangers to any football club inherent in the current ownership models and lack of financial governance, can be seen in what has happened to the ownership of Reading Football Club since I submitted my previous evidence to the Committee in Jan 2011. At that stage Reading FC was owned by Sir John Madejski, and my evidence praised his investment in infrastructure rather than transfer fees and players’ wages. 13. In January 2012 it was announced that Sir John Madejski had sold Reading FC to an organisation known as Thames Sports Investments (TSI), in a deal brokered by a Christopher Samuelson with Anton Zingarevich, son of Russian oligarch Boris Zingarevich, named as the owner. This takeover was ratified by the Premier League at the end of May 2012, at which point Samuelson, Anton Zingarevich and Andrew Obolensky joined the board of the football club as directors. 14. This means that within a period of less than six months, Reading supporters have gone from having full visibility of their club’s owners to the opposite end of the spectrum. Whereas previously club accounts were filed and so publicly available via Companies House, TSI is registered in Gibraltar and so supporters will have no access to these, and no actual confirmation that the club’s ownership and financial situation is as reported to them. 15. Considering that a football club is more than just any other business and occupies a place in its community more akin to a cultural asset like a painting or listed building than a pure business entity, there can be no legitimate justification for such secrecy. This level of secrecy is made even more worrying considering cobber Pack: U PL: COE1 [E] Processed: [25-01-2013 11:58] Job: 023143 Unit: PG01 Source: /MILES/PKU/INPUT/023143/023143_w022_023143_w025_michelle_FGF 023 - Football Conference.xml

Ev w12 Culture, Media and Sport Committee: Evidence

the business background of Christopher Samuelson, who has made his living in the mass-production of offshore and dummy companies and who is a director of a director of Mutual Trust SA, who have publicly stated, “Our challenge is to provide our clients with their fundamental rights to privacy of their information and to protect their assets from attack and confiscation. We will not use financial institutions to hold assets on behalf of our clients unless we are certain that the financial institution will uphold its fundamental obligations on confidentiality and its fiduciary duties. Equally we will not use jurisdictions that do not respect and uphold the fundamental right of clients of confidentiality. Your information is safe in our hands, for always. This statement is the cornerstone of our trust and integrity.” 16. Such an obsession with secrecy is surely at odds with the fundamental transparency which a club’s supporters deserve with regard to who owns their football club, how it is managed and run and what its financial future is. For instance in this case the involvement of both Boris Zingarevich and Andrew Obolensky is not clear, nor is the breakdown of ownership between parties and actual sources of funding. 17. Although the Premier League have ratified this deal, Reading supporters have been given no visibility of any checks made or access to any financial information which the Premier League has obtained regarding their club, now are aware of what checks have been made or of any assurances or guarantees given. Thus they are disenfranchised from the process of validating any promises made by the new owner(s), both at the short- term takeover and in the longer term future. Their only option is to take any promises made to them regarding their club and the practices and intentions of those who own it on trust only. 18. From an overall financial governance point of view allowing football clubs to be owned through secret overseas holding companies must raise the level of risk. As a hypothetical example, and without in any way intending to question the intentions or financial integrity of any of the directors of the football club, the current structure of Reading FC and TSI, registered in Gibraltar, would make an ideal legal vehicle for money- laundering should anyone be so inclined. This must surely be an inappropriate and unnecessarily complex legal structure for a small-town, community-orientated football club. 19. The football authorities’ proposals for supporter participation or representation are also inadequate, providing minimal improvement on today’s inconsistent and ad-hoc methods of representation. Although the idea of Supporter Liaison Officers (SLOs) has some potential, this proposal falls short of being effective in two key areas, as defined below : 20. Firstly, these proposals for SLOs only apply at the highest level of English football, and so SLOs will be restricted to just 20 of the 92 League clubs. Although the best financed clubs will have SLOs in place, these are not always the best-supported, and a significant percentage of match-going supporters will not benefit from SLOs at their club. In addition, when clubs leave the Premier League as a result of relegation they are likely to dispense with the services of an FLO. 21. Secondly, SLOs must be properly independent and appointed by supporters if they are to be able to fulfil a role of properly representing supporters. The current proposals make no reference to methods of selection of SLOs, but do make it clear that they will be employees of the football club. This is likely to restrict their ability to work on behalf of supporters and will inevitably lead to conflicts of interest when they are called upon to criticise their employers or colleagues. For the SLO role to be truly effective SLOs must be independent of the club, and be appointed by supporters in a truly independent way. 22. For the above two criticism to be overcome, it is clear that SLOs must be properly funded. I would suggest that this is easily performed by application of a small levy either on ticket prices or on TV revenue in order to fund local SLOs and their methods of appointment. 23. Core funding for fund national supporters’ organisation such as Supporters Direct and the Football Supporters’ Federation is also essential in order to ensure their effectiveness and independence. Funding for these organisations should also be made via the ticket-price levy referred to above. As an example, a levy of just 2.5p per attendance in the top Four Divisions would have raised nearly £736k last season in order to fund supporters’ organisations and SLOs. July 2012

Written evidence submitted by RamsTrust Having read through The FA, The Premier League and The Football League joint response in comparison to the recommendations of the DCMS report and the Government recommendations, it seems woefully inadequate. If fails to address many of the key points in the recommendations and pays only lip service in other areas. Following the original DCMS recommendation, the government then gave their formal backing—and urged the FA to “agree proposals, including plans for implementation” by the end of February or they would bring in legislation as necessary. The FA did not produce proposals or plans for implementation by the deadline, but has produced a 16-page response—which mostly indicates an intention to make some of the recommended changes, but also absolves cobber Pack: U PL: COE1 [O] Processed: [25-01-2013 11:58] Job: 023143 Unit: PG01 Source: /MILES/PKU/INPUT/023143/023143_w022_023143_w025_michelle_FGF 023 - Football Conference.xml

Culture, Media and Sport Committee: Evidence Ev w13

itself from responsibility for many of the others. They have also contrived to suggest their own different proposals—which do not all appear to meet the intention of the original recommendations. If this is accepted, it could mean that the vast amount of time and effort put in by many people (paid & unpaid) to put together viable, workable proposals to improve the game in this country may have been wasted. The biggest disappointment in the coordinated response is not what is included in the document; it is what is not included. Some of the most significant recommendations—and some of the biggest issues affecting the game—are effectively ignored. The word DEBT is never mentioned in the response—and this came at the end of the week where the biggest British club ever to enter administration (Glasgow Rangers) was being ripped apart by administrators, whilst Portsmouth & Port Vale were struggling to survive until the end of the season. The Football Creditors Rule is also never mentioned—despite this being one of the most significant issues for HMRC at present, and an anathema to common sense—proven by the contrast between Portsmouth (major staff redundancies, players paid in full) & Rangers (players take wage cuts, few redundancies) in their current states. The regulation of club ownership is largely glossed over and there is precious little encouragement for supporters or supporters’ groups. This doesn’t meet the government’s objectives—so logically they should now act and introduce legislation to enforce their original recommendations. There are a few positive messages—and it is just possible that these could lead to improvements in the game, but not enough. The main DCMS/Government recommendation is reform of the FA Board and decision-making structure. This requirement is accepted and they state an intention to reduce the Board to between 8 and 12 members by Summer 2013. This does not meet the suggestion of more independent members on a 10-person board, but does indicate progress. There is similarly a breakdown of responsibilities for key aspects of the game—again a start at giving some clarity in how football should be run effectively. Unfortunately, in doing this the FA has attempted to absolve itself from any responsibility for “customer/fan issues” (they don’t seem to like the word “supporter”, preferring “customer”)—saying this is the responsibility of the clubs themselves. Clearly this is a total abdication of responsibility—from the body that all supporters need to trust to run the game in their best interests. They propose making the FA council (which will have less power in the new structure) into a “parliament of football”—but without any intention of making it more representative by having all key groups involved in electing members. They propose a new “Regulatory Policy Group” and “the FA Regulatory Authority” reporting to the FA Board to ensure regulatory compliance—including determining applications for owners and directors criteria and determination of applications for ground moves. There is, however, no indication of changes to regulation to better protect clubs and supporters in the first place. The other clear acceptance of recommendation is that they do propose a new club licensing framework (as proposed by Supporters Direct)—to ensure minimum criteria for acceptance to join each league or FA competition each season. There are initially almost no criteria they need to meet (“meet league rules” & not be “in breach of any legal obligations or club to club obligations”), but—again—it’s a start. There is a section which mentions supporters (eventually), and even says there are occasions when it might be worth talking to them! It goes so far as to say clubs should consult and engage with supporter groups—and that the groups will be able to escalate to the league if this is not happening. Without specific regulation though, this could be relatively meaningless (paying “lip service” to communicating with supporter groups as happens currently). They do make an absolute statement regarding Supporter Liaison Officers (SLO)(as promoted by Supporters Direct through UEFA) though—from next season, every Premier League Club must appoint an SLO and every league club must at least have someone performing the role. This, at least, is a positive message. They do “commit to working with Government to remove legal and bureaucratic hurdles to supporters obtaining and retaining ownership interests in clubs.” They then go on to say they don’t believe there are any current obstacles in place, and at no point do they suggest specific regulation to involve supporters in Club Boards (in any circumstances). They entirely miss the point on Supporters Direct itself—despite the government recommendation: “The Government believes that a solution to provide funding for the long-term future of Supporters Direct and other high-profile supporters group representative bodies should not be beyond the skill of football authorities, working closely with the bodies concerned.” The response is “SD should… primarily rely on funding raised from their membership or their own initiatives”—although it does go on to potentially offer match-funding from the Premier League “Fans Fund” (as is currently in place). This section is disappointing as there appears to be no intention to work with supporters groups in any way—or to offer any specific assistance. Supporters cobber Pack: U PL: COE1 [E] Processed: [25-01-2013 11:58] Job: 023143 Unit: PG01 Source: /MILES/PKU/INPUT/023143/023143_w022_023143_w025_michelle_FGF 023 - Football Conference.xml

Ev w14 Culture, Media and Sport Committee: Evidence

Direct is already suffering as a result of this—and is having to seek commercial revenue opportunities rather than focussing on helping clubs & supporters—which is what it SHOULD be doing.

There is reference to the increased financial regulation being brought in (salary caps in lower leagues based on percentage of turnover, UEFA Financial Fair Play for top teams—and similar systems to be brought in for the Championship). Again, the references to financial governance appear woefully inadequate in the current financial climate for so many clubs.

Ministers need to retain the “threat” of introducing legislation, and to be prepared to see it through. Otherwise they will have failed on a pledge to address the problems in the game—after so much good work has gone before.

In summary, the Football authorities have failed to meet the requirements presented to Parliament in October 2011—to “agree proposals, including plans for implementation” of the recommendations by the end of February 2012. Although there are some positive steps indicated, the response is lacking in a number of key areas. It was stated “The Government is fully committed to ensuring that the changes put forward by the football authorities make a lasting and substantive difference. If that does not happen the Government will introduce a legal requirement on the Football Association to implement the appropriate governance clauses by the swiftest possible means.” This legislation is now required in order to implement the recommendations in full and not waste the time and effort put in to date. This is a golden opportunity to reform football in this country to improve the game for the many millions of people affected—and to protect the game we love.

The following areas in particular are not adequately addressed, and therefore legislation will be required. Please note these are the key areas I have identified, there will be others which other observers will have recognised: — There is nothing in the response to address the biggest problem affecting the game—debt. — The Football Creditors Rule is also never mentioned—despite this being one of the most significant issues for HMRC at present, and an anathema to common sense—proven by the contrast between Portsmouth (major staff redundancies, but players paid in full) & Rangers (players take wage cuts, few redundancies). — The FA has attempted to absolve itself from any responsibility for “customer/fan issues” (they don’t seem to like the word “supporter”, preferring “customer”)—saying this is the responsibility of the clubs themselves. Clearly this is a total abdication of responsibility—from the body that all supporters need to trust to run the game in their best interests. — They propose making the FA Council (which will have less power in the new structure) into a “parliament of football”—but without any intention of making it more representative by having all key groups involved in electing members. — Although they have accepted the need to adopt a new Club Licensing framework, there are almost no criteria applied to obtain a license. The proposals put forward by Supporters Direct— particularly for supporter involvement—have been entirely ignored. — They entirely miss the point on Supporters Direct itself—despite the government recommendation: “The Government believes that a solution to provide funding for the long- term future of Supporters Direct and other high-profile supporters group representative bodies should not be beyond the skill of football authorities, working closely with the bodies concerned.” Their response is that “SD should… primarily rely on funding raised from their membership or their own initiatives”—although it does go on to potentially offer match-funding from the Premier League “Fans Fund” (as is currently in place). There appears to be no intention to work with supporters groups in any way—or to offer any specific assistance to guarantee the future for the vital work SD does in working with supporters to protect and save clubs in trouble.

Please let me know if you need any additional information.

I believe a failure to act now—after the very clear statements in the original Government recommendations— would be a “cop-out” and would allow the Football authorities free reign to ignore the Government in future. This would be a devastating blow to the millions of supporters who have trusted the Government to “grasp the nettle” and address the serious problems in the game in this country. July 2012 cobber Pack: U PL: COE1 [O] Processed: [25-01-2013 11:58] Job: 023143 Unit: PG01 Source: /MILES/PKU/INPUT/023143/023143_w022_023143_w025_michelle_FGF 023 - Football Conference.xml

Culture, Media and Sport Committee: Evidence Ev w15

Written evidence submitted by Blues Trust (Supporters’ Trust at Birmingham City) As a properly constituted Supporters’ Trust (we are a registered IPS) and as members of Supporters Direct, we welcome the opportunity to submit evidence to the Select Committee. We have noted with interest the Committee’s original report and both the Government and football authorities’ responses. Both the report and the Government’s response give us much encouragement but we find that the football authorities’ response falls woefully short of what is required. Our Trust was formed as a direct result of the discontent amongst many Birmingham City fans with a number of issues concerning the ownership and control of our football club. We started the process of formation just under a year ago, with considerable help and support from Supporters Direct and we hope shortly to hold our first AGM, at which our first democratically elected board can be constituted. In the meantime, we have an Interim Board and also a Steering Group that is open to all members of the Trust. Our organisation is based on the three principles of openness, transparency and democratic accountability; principles which are often sadly lacking in the present day administration of football in this country. Birmingham City Football Club has had a number of different owners in recent years, of varying degrees of competence and, dare one say, veracity. All have been distinguished by taking a distinctly monoptic view of the ownership of the Club, ie, the Club is a business (not disputed but inadequate) decisions are made by a Board of Directors (not disputed but not transparent), the fans are, to varying degrees, “cherished” but strictly as paying customers (strongly disputed). This classic business model has been an “idea in good currency” for some time, not just in football but in all walks of life. It is only now being put under close scrutiny as its shortcomings and inadequacies are uncovered (cf. the global economic crisis). As far as we are aware, the current owners are an offshore company, Birmingham International Holdings (BIH) based in Hong Kong but registered in the Cayman Islands. The main shareholder appears to be a Mr Carson Yeung, a Hong Kong resident, currently on remand on charges, inter alia, of money laundering. Various other Chinese business people appear to have substantial holdings in club, which have changed over time as the need for fresh cash injections have arisen. The initial business model was to market the Club in the Far East, particularly China, and on the back of this, to sell branded merchandise in an expanding market; not in themselves reprehensible objectives, particularly if some of these profits were to be directed at improving the Club. However, it appears that the model was heavily dependent on the club’s Premiership status and, with relegation, the financial strategy was found wanting, exacerbated by the primary shareholders legal problems. In the absence of Mr Yeung, or any of the other major investors, day to day, non-playing, management of the Club has been in the hands of a Mr Peter Pannu. Mr Pannu, in difficult circumstances, has done his best both to keep the Club solvent and the fans informed. The Trust is not a protest group, per se, and would wish to give credit where it is due. However, it is clear that Mr Pannu is not always in command of all the facts concerning the Club’s business machinations, particularly as far as they are in the hands of the off shore owners. In particular, there have been difficulties in lodging both the Club and BIH’s accounts, which has resulted in a transfer embargo being place on the Club. Relationships with the Trust were, at first, extremely difficult, although they appear to be improving as the realisation dawns that we wish to support the Club, rather than simply criticise. As yet, however, there have been no formal meetings between the Club and Trust. We believe that Clubs should be required to inform and consult bona fide Supporters Trusts like ours and we would endorse Supporters Direct’s “fit and proper Supporters’ Trusts” concept contained in their Key Principles for Club Licensing in England as a way of doing this. We also believe that the Football Authorities proposal to set up “working groups” is totally inadequate. At Birmingham, we are faced with a situation where we do not actually know for certain who owns the Club, where it appears that shirt sponsorship deals may have been tied in with share ownership, loans have been made at well above market rates of interest and where it is possible that the offshore holding company could be used as a vehicle for circumventing FIFA rules regarding the multiple ownership of club shares. In our view, all of these practices point to an environment that is in clear need of more substantive regulation from its governing body—the Football Association. However, under the current proposals from the football authorities, decision-making in the following areas would be transferred to “County FAs, Clubs and Leagues where appropriate”: — County FA, Club, and League commercial and financial matters; — Club business and operating issues, stadium, customer/fan issues; — Club/league relationship with other competition organisers eg UEFA, either individually or through ECA, EPFL; and — Club ticket prices; club distributions and parachute payments. Given that the Football Association is supposedly the governing body of football in England, this seems to us a critical undermining of its authority, and another worrying step towards self-regulation: something football has shown itself incapable of doing on numerous occasions. In the face of all this, and as the Committee and Government recognise, we believe that Supporters Trusts have a vital role to play in ensuring the future of a properly run English football system. We could not have got this far without the moral and financial support of Supporters Direct and so we are very disappointed at the weak and pusillanimous response of the Football Authorities regarding the future funding of that cobber Pack: U PL: COE1 [E] Processed: [25-01-2013 11:58] Job: 023143 Unit: PG01 Source: /MILES/PKU/INPUT/023143/023143_w022_023143_w025_michelle_FGF 023 - Football Conference.xml

Ev w16 Culture, Media and Sport Committee: Evidence

organisation. This is pari passu with the equivocal response to the Governments three priorities for the sport. We would strongly endorse Supporters Direct’s proposals for the reform of the FA and “key principles” for the licensing of clubs in England. Without these very necessary reforms, nothing much will change and we will see more clubs plunged into financial uncertainty and prey to mendacious ownership. The only people who really care about the future of a football club are its supporters. It is high time they had a voice. July 2012

Written evidence submitted by Notts County Supporters’ Trust In submitting its views on the Football Authorities’ response to the DCMS Select Committee report, the Notts County Supporters’ Trust wishes to highlight six points. As requested these are initially summarised as bullet points. — The proposed Regulatory Body (FARA) should be an independent organisation rather than “autonomous unit within the FA.” Its complete independence is essential. — The Football Authorities acceptance of a Club Licensing system is welcomed, but is incomplete without the “Fit and Proper Trusts” element of such licensing. — Various working groups are proposed. The speed at which they are established and report back will be an indication of how important they are really seen to be by the Football Authorities. — Broadcasting rights for example, have brought so much money into the game that it seems reprehensible that adequate funding arrangements for Supporters Direct, the organisation which does so much for supporters, are not already established. — The proposed FA Council seems unworkably large. — The structure for dealing with grievances over supporter engagement, consultation and ownership at local and club level is inadequate. An independent regulatory body should be in place to deal with issues rather than the Leagues (not independent) and the Football Ombudsman (no authority).

Further Detail 1. The FA Regulatory Body (FARA) 1.1 The Football Authorities report indicates that the role of the FARA would be: monitoring, investigation, charging and enforcement oversight of the process of appointments to judicial (regulatory commission) and appeal bodies; and ensuring effective training and performance assessment. Such wide ranging responsibilities, including disciplinary procedures, are welcomed as ways forward for football governance but the report adds “The FARA will be accountable through its chairman to the FA Board for performance and budget (including quarterly reports.)”. This seems to leave power in the hands of the FA, opportunity for obfuscation and to lessen the independence of the regulatory decisions.

2. Club Licensing 2.1 The Football Authorities response states: “A new FA Club Licence will be created to ensure that every club in English football, at every level will be required to be registered with the FA, either directly or indirectly through county FA’s, through an FA Club Licence in order to participate in either the national or professional game, and each club shall be obliged to satisfy the requirements of a ‘Competition Licence’ in order to participate in that competition.” A Club licensing approach is welcomed but the above does not go on to add that “supporters, as key stakeholders, have an appropriate role in the governance of football clubs.” The licensing of “Fit and Proper Supporters Trusts” is part of the Club Licensing proposal put forward by Supporters Direct and needs to be implemented along with the above. The three tier Supporter Trust “Rights and Responsibilities” approach of Preliminary, Intermediate and Higher has much to commend it and would lead to supporter involvement in the governance of football. Key stakeholders would be involved.

3. Working Groups 3.1 “The National Game Board and the Professional Game Board will therefore establish standing and ad- hoc Working Groups to advise and assist the formation of policy and this will include appointing individuals who can contribute to this work and bring supporter perspectives and input.” 3.2 It is concerning that the word appointed implies a selection process. Invitations to contribute should not depend upon NGB or PGB “appointing”. cobber Pack: U PL: COE1 [O] Processed: [25-01-2013 11:58] Job: 023143 Unit: PG01 Source: /MILES/PKU/INPUT/023143/023143_w022_023143_w025_michelle_FGF 023 - Football Conference.xml

Culture, Media and Sport Committee: Evidence Ev w17

3.3 Standing working groups can linger around ineffectively. Specific task groups would be a better approach and reflect a more modern, transparent and accountable approach to football governance. 3.4 The speed at which working groups are established, report back and have recommendations publicly put into practice would be a good measure of whether issues such as supporter representation have been “kicked into the long grass” or actually properly addressed.

4. Funding for Supporters Direct 4.1 Stating that Supporters Direct should “primarily rely upon funding raised from its membership or their own initiatives” again seems rather dismissive of Supporters Direct and indeed of supporters themselves. 4.2 Broadcasting rights bring unprecedented funding levels into the game and the offer of “office accommodation on favourable terms” seems on one level generous but on another patronising and paltry. Plus, of course, the later possibility of removing those favourable rates.

5. The FA Council 5.1 The commitment (though offered with reservations) to commit to a smaller FA Board is welcomed and essential for decision making and progress. 5.2 The FA Council is in the main made up of elected representatives of County FAs, Leagues, Clubs and other organisations and as such seems a huge organisation. Unworkably large and unrepresentative of anything other than specific interests, it would seem essential that such a Council is reconsidered, reduced in size and decisions made as to what organisations it should actually represent, especially if its Chair is to have the FA Board to report to him/her.

6. Supporter Engagement, Consultation and Ownership 6.1 “The football authorities commit to working with Government to remove legal and bureaucratic hurdles to supporters obtaining and retaining ownership interests in Clubs.” This is welcomed and speedy progress hoped for. 6.2 Supporter engagement, consultation and ownership is not mentioned until near the end of the response and comes after they have stated “The FA Board will report annually on its operations in all areas....” It is to be hoped that in considering the “Inquiry into Football Governance” the Football Authorities are not overlooking the importance and role of supporters. July 2012

Written evidence submitted by the Fulham Supporters’ Trust About the Fulham Supporters’ Trust The Fulham Supporters’ Trust is the only democratic, campaigning organisation of supporters of Fulham FC. The Trust, which grew from the “Back to the Cottage” campaign, was set up in 2003 in response to proposals to move Fulham away from their Craven Cottage home and out of the London Borough of Hammersmith & Fulham. Our founding chair, Tom Greatrex, is now the Labour and Co-Operative Party Member of Parliament for Rutherglen and Hamilton West. The Trust is affiliated to the Football Supporters’ Federation (FSF) and Supporters’ Direct (SD) and works closely with Fulham fans, Hammersmith & Fulham Council, local MPs, community groups and Fulham Football Club to further the interests of Fulham supporters in creating a sustainable and successful Football Club at Craven Cottage. The Trust compiled a submission to the Parliamentary Inquiry on Football Governance during the 2010 evidence session of the Culture, Media and Sport Select Committee and shared the Committee’s final report, as well as the responses from the Government and the Football Authorities, with our membership. We submit this follow-up evidence in an attempt to offer our views and experiences as a supporters’ trust and to stress the importance of real and lasting football reform at all levels of our game.

Summary of Evidence The Fulham Supporters’ Trust believes: 1. It was a mistake to ask for joint evidence from the football authorities as they would therefore only present proposals on which they were all agreed. The plans for the future of the game seem to dilute the role of the Football Association, which could be football’s proper governance and regulatory authority. If the FA is not to fulfil this role, there is a strong case for an independent regulator for football. 2. The hegemony of the Premier League has hindered every serious attempt at football reform over the past two decades. The Premier League has proved incapable of regulating their members and refuses to engage with the supporters who fund the League’s largesse. This must change. cobber Pack: U PL: COE1 [E] Processed: [25-01-2013 11:58] Job: 023143 Unit: PG01 Source: /MILES/PKU/INPUT/023143/023143_w022_023143_w025_michelle_FGF 023 - Football Conference.xml

Ev w18 Culture, Media and Sport Committee: Evidence

3. The reforms of the FA Board and FA Council do not deliver equal rights to those members representing the supporters, managers, referees, the disabled and those from ethnic minorities. The FA Board should also be open and transparent in line with the requirements expected of clubs, individuals and owners. A new body, sitting between the Board and the Council, should be established to ensure that all stakeholders, especially supporters, are properly represented. 4. The proposed licensing and regulatory reforms are unworkable. They do not impose strong enough restrictions and are not as stringent as the UEFA license. A stronger licensing framework would encourage clubs and owners to adopt more sustainable practices befitting their status as custodians of community assets and protect sports stadia from loss. 5. The passing mentions of debt and insolvency are insulting to the supporters of clubs who have been through administration and liquidation. 6. The Select Committee should ask for greater clarity on the formation of the expert working groups and consider pressing the football authorities further on how clubs can engage with their supporters’ trusts. 7. The football authorities should consider again whether there is any scope for the long-term funding of Supporters Direct and the Football Supporters’ Federation.

1. Role of the FA, County FAs and the Leagues 1.1 The response of the football authorities stated that “matters outside [the] scope of the FA” will be the responsibility of the “County FAs, Clubs and Leagues as appropriate”. Given that examples of these issues include “club business and operating issues, stadium, customer and fan issues, Club or League relationship with other competition organisers, club ticket prices and club distribution and parachute payments,” it is very disconcerting that there is no proposed independent oversight of these areas and no engagement with the representatives of supporters’ bodies. 1.2 Whilst the Fulham Supporters’ Trust has worked very closely with Fulham Football Club in recent months to establish a close and mutually beneficial working relationship, it is of great concern that, despite the recommendations from more than 50 supporters’ trusts and fans’ organisations, neither the Government nor the football authorities have introduced any proposals to tackle the hegemony of the Premier League, who have effectively blocked any attempts to reform football over the past 20 years. 1.3 The Football Association’s (FA) position at the head of the national and professional game makes them the ideal body to regulate the various Leagues, Clubs and interests under its remit. Given the amount of time it has taken to implement modest reforms to the FA’s structures, and the Select Committee’s own acknowledgement that the European governance models have much to recommend them, we reiterate our call from our initial evidence that both the Select Committee and the Government strongly consider recommending and then, if necessary, legislating to introduce an independent regulator for football. Without either the FA or an independent regulator overseeing the various levels of the game and balancing the competing commercial and sporting interests, British football will remain in a dangerously unhealthy state. 1.4 In the case of the Premier League, this is a particularly pressing issue. Most fans aspire to see their team playing in the top flight but the cost of competing at the highest level—even for a season—can be catastrophic. In the summer of 2010, the total debt of Premier League clubs stood at £2.6 billion. The Premier League’s status as “the best domestic league in the world”, with its global popularity and marketability, is undermined by its inability to enforce even the most basic levels of corporate governance. Supporters of Portsmouth, Blackburn Rovers, Birmingham City and Leeds United—to name just four—have recently suffered following the failure to implement safeguards against financial malpractice whilst, currently, Manchester United, Liverpool and Reading supporters have to pay as much attention to their club’s accounts, business and commercial activities as to on on-field matters. 1.5 The Premier League is the pinnacle of English and Welsh professional football. Match-day supporters and those who purchase replica kits and merchandise do much to fund the commercial success of the League and boost the balance sheets of the clubs. It is matter of a profound concern to us that the Premier League still fails to consult supporters on a regular basis or liaise with the supporters’ trusts at their clubs. This has to change.

2. The FA, FA Board, FA Council, stakeholders and “clear decision making for the game” 2.1 The complexities of the FA’s governance structure remain beyond the grasp of most football fans and are a relic of the game’s amateur past. We welcome the appointment of the independent executive and non- executive directors to the FA Board and strongly second the recommendations of the original Select Committee report that these independent directors should hold a majority on the Board. The football authorities have suggested reducing the size of the FA Board, but have not publicised their suggested composition of the new Board. 2.2 We feel it is essential that the group currently described as “the football family” should be properly represented in the new structures. This means that those FA Council members representing the supporters, managers, referees, the disabled and those from other races should be given the same rights as members of the cobber Pack: U PL: COE1 [O] Processed: [25-01-2013 11:58] Job: 023143 Unit: PG01 Source: /MILES/PKU/INPUT/023143/023143_w022_023143_w025_michelle_FGF 023 - Football Conference.xml

Culture, Media and Sport Committee: Evidence Ev w19

National Game Board or the Professional Game Board. It does not seem fair or reasonable that individuals who give up their time to represent fellow football enthusiasts or those participating in or seeking to change the game for the better, at whatever level, are not able to be represented on the Board, stand for election to the Board or vote during Board elections.

2.3 We strongly support the suggestion made by one of the national bodies to which we are affiliated, the Football Supporters’ Federation, that a new body between the Board and the Council should be established to ensure that all of the game’s stakeholders, including the supporters, are adequately represented. Should the new body be structured in such a way as to prevent any vested interests from being dominant, this would allow ideas to flow directly up from the grassroots of the game to the FA and give a voice to the millions of ordinary football fans, players, coaches and managers who are currently frustrated by the inaccessibility of the game’s governance structure. Further measures to increase the transparency of the FA’s Board and Council should also be considered by the Select Committee.

2.4 We welcome the introduction of the Women’s Football Committee, which will report directly to the FA Board. We note, however, that the Football Association’s lack of a vision for women’s football meant that the proposed Women’s Soccer League has been more than a decade in the making and led to many professional clubs severing links with their Ladies’ side. In the case of Fulham, who were committed to embracing professionalism and encouraging female participation in football around the millennium, this was profoundly disappointing. Many of the leading stars of the current English side, coached so successfully by Hope Powell, were part of a successful Fulham side that was suddenly broken up and the lack of a national league meant that our best young players were forced to choose between travelling overseas or giving up the game. We sincerely hope that the Women’s Soccer League in this country will go from strength to strength and the franchising requirements be loosened in the future to allow more clubs to compete at the highest level.

3. Regulation and Licensing

3.1 The case for stronger regulation of the game in England and Wales should not need restating. Along with many other Supporters’ Trusts, we submitted evidence to the original Select Committee inquiry highlighting the dangers of unsustainable debt levels, leveraged buyouts and the highly unsatisfactory nature of some of the current ownership arrangements at professional and amateur clubs.

3.2 It is immensely disappointing to read that the football authorities have decided to continue with the self- regulatory model that has failed football in this country for decades. The Premier League and the Football League have proven themselves unable to regulate the excesses of their members as since the formation of the Premier League in 1992 there have been 92 insolvencies in the top five divisions. With insolvencies, administration and debt still troubling far too many of our clubs, now is the time for the Select Committee and the Government to insist on a governance structure that places the game’s governing body in charge of devising the regulations that would then be imposed on the leagues.

3.3 While both the Premier League and the Football League should be congratulated on adopting the Financial Fair Play rules introduced by UEFA, the football authorities’ current club licensing plans fall woefully short of the stringent requirements needed to prevent further instances of “financial doping”, mismanagement and outright abuses of power from unscrupulous owners. The FA’s proposed club license amounts to little more than a certificate of registration permitting the holder to participate in the FA’s competitions. From the response of the football authorities, it also appears as though it will be the individual leagues who will be in charge of strengthening the regulations of the FA licence, which could lead to a multi-layered licensing system— something that is exactly the opposite of that intended by UEFA. Little attention appears to have been paid to the impact of these woolly licensing plans upon non-league football, where the risks to clubs, supporters and grounds are far more alarming should owners act against the long-term interests of the supporters. The recent examples of Northwich Victoria and Darlington are especially instructive.

3.4 We strongly believe that the Select Committee should insist that the FA—or an independent regulator for football able to sit above the competing National and Professional Game interests—take this unique opportunity to compel all clubs competing in domestic competitions to abide by the terms of a strict license, which would ensure the safeguarding of the game, the clubs and the stadia in which matches are played. Once a club becomes separated from their stadium or their local community, it can be the start of a slippery slope towards insolvency. A robust licensing framework would be the impetus to encourage clubs and owners to become more sustainable and recognise the devastation that can be wreaked on a community should a football club cease to exist. The alternative, of mounting insolvencies and bleeding of valuable community assets, is simply unthinkable.

3.5 We believe the football authorities’ proposals are unworkable in their current form. There remains a disturbing lack of detail in how regulations would be applied and assessed on a daily basis and how those clubs or individuals that breached the conditions of the license would be punished. Most troubling of all is that the creation of the new Football Association Regulatory Authority (FARA) will add another layer of committees and bureaucracy to an already confusing structure. The terms of reference and the scope of the FARA are in an urgent need of clarity, as is the role of the Independent Football Ombudsman. cobber Pack: U PL: COE1 [E] Processed: [25-01-2013 11:58] Job: 023143 Unit: PG01 Source: /MILES/PKU/INPUT/023143/023143_w022_023143_w025_michelle_FGF 023 - Football Conference.xml

Ev w20 Culture, Media and Sport Committee: Evidence

4. Debt and Insolvency 4.1 It is disappointing that the football authorities’ response mentions debt and insolvency only once each throughout the sixteen page document. The mention of debt comes when the football authorities’ acknowledge the “debt of gratitude to volunteers” up and down the country. This ignores the fact that the Government response to the Select Committee’s report clearly confirmed that “the Government shares the concern expressed by the Committee at the extent of losses and the number of clubs on the edge of viability”. 4.2 In our initial submission, we noted the fallacious claims by Richard Scudamore, the Premier League’s chief executive, that its clubs’ ever-mounting debt was sustainable (as evidenced by the willingness of banks to continue lending to them) and that their owners were managing them responsibly. This was at a time when several then and present Premier League clubs had been classified within the world’s 20 most indebted, a situation that persists. 4.3 In addition to nearly a century of insolvencies since the formation of the Premier League in 1992, many clubs in the lower divisions and in the semi-professional leagues teeter on the edge of fiscal collapse, with all the deleterious effects on staff and the local community, both fans and business who depend on the club for supply contracts and patronage. The failure to address the toxic issue of debt is indicative of a rather blasé attitude to one of the most significant “ills” in the English game. If anything, the extensive “financial doping” widespread in the Premier League is treated, irrationally, as a joyous consequence of increasing revenue gleaned from television broadcasting rights. 4.4 As a result, transfer fees for even the most journey-men of players are exorbitant, with increased salary demands, conditions and agent’s “cut” adding to the total, ensuring that even more monies must be borrowed to fund the new acquisitions, thereby increasing the debt yet further. The Premier League’s “going concern” assessment of its clubs has not gone far enough, since many continue to accumulate massive losses, yet still be presented as a going concern. UEFA’s Financial Fair Play regulations may force some clubs to show a decreasing trend of losses (and thus avoid the stipulation that they must break even) in order for them to participate in their competitions, but this is unlikely to have any significant effect further down the football pyramid. 4.5 For the majority of the 72 clubs in the Football League and all those below that, increasing costs and decreasing revenue ensure that severe debt (and possible insolvency) is almost unavoidable.

5. Asset protection and transparent ownership 5.1 The Trust re-iterates its belief that the laissez-faire approach to governance in the Premier League, whereby the owners or chairmen of the top 20 clubs legislate on themselves, not only remains wholly inadequate but similar concerns extend throughout the football pyramid. 5.2 Although asset protection is more conventionally an aspect of insurance of a club’s players and facilities, within football governance it represents the converse of “asset stripping”, whereby the property assets, usually property, are removed from the club structure. In addition to increasing the club’s up costs, the owner(s) can assume personal control of valuable real estate, in the case of the ground itself often leased back to the club at punitive rates. “Fire sales” of players, particularly at relegated clubs in order to cut costs, denudes a club of another of its major assets and realises substantial transfer fees for new owners, often far more than their initial investment. 5.3 To counter such moves, the model, typified by the Chelsea Pitch Owners’ Association, where shares were offered and purchased to protect the long-term ownership of the Stamford Bridge pitch, is a method by which the local community may prevent the asset-stripping of their club by its owners realising the property development value of the site. 5.4 Broadening this approach by legislation promoting the possibility for supporters to purchase their club’s pitch or making it an entry condition for promoted or new clubs (or those emerging from administration) should find favour with supporters, since they will promote proposals that are in the best interests of their club. Making such measures a condition for new owners, and their willingness or reluctance to do so, would give a clear indication to the fans about their intentions for the club and, by consequence, their attitude to “open” governance at the club. 5.5 The rightly-derided “fit and proper persons test” has shown itself to be feeble and even though its most spectacular recent casualty was in the Scottish, rather than the English, Premier League, it has resulted in the liquidation of one of the most well-known clubs in World football, Glasgow Rangers FC. The disqualification of Craig Whyte as a company director in was a matter of public record prior to his purchase of the club, but only very belatedly was he found to be unfit, by which time a myriad of additional irregularities has brought Rangers to the brink of extinction. 5.6 The previously-noted problems at Portsmouth FC have re-emerged, albeit within the Football League and in different circumstances, but the result is the same; the club has re-entered administration and remains in danger of liquidation. The refusal by the UK’s Financial Services Authority in 2009 to allow AB Bankas Snoras to operate on these shores and its very negative comments about chairman and main shareholder, Vladimir Antonov, should have raised immediate concerns and questions by the Football League about the cobber Pack: U PL: COE1 [O] Processed: [25-01-2013 11:58] Job: 023143 Unit: PG01 Source: /MILES/PKU/INPUT/023143/023143_w022_023143_w025_michelle_FGF 023 - Football Conference.xml

Culture, Media and Sport Committee: Evidence Ev w21

suitability of the subsequent takeover of Portsmouth by Convers Sport Initiatives in 2011, the latter also controlled by Antonov, but this was approved, seemingly without a murmur. 5.7 The willingness of football’s administrators, at any level, to “turn a blind eye” to the dubious, sometimes criminal, backgrounds of those who wish to take over football clubs or to perform only the most perfunctory of investigations into potential purchasers indicates that this is an area where legislation is needed, with the establishment of an independent statutory body with appropriate powers to enforce compliance.

6. Supporter Engagement, Consultation and Ownership 6.1 The case for supporters owning their football clubs should by now be unimpeachable. Twenty-five supporters’ trusts currently fully own or control their football club, whilst more than a hundred supporters’ trusts have a shareholding. In a modern world, where football clubs are viewed more as businesses than community assets, foreign investment and leveraged buyouts—as well as mounting debt levels—can place clubs in great jeopardy. Since 2000, supporters’ trusts have brought more than £30 million of finance into football. The investment made by supporters into their football clubs is much more emotional and long-term than those of business investors and clubs that are benefit from supporter investment are far more sustainable in the long run. 6.2 The mounting levels of debt, coupled with the poor corporate governance at every level of the game, mean that every day that passes without a firm commitment to remove many of the barriers to supporter investment and ownership at their clubs makes it more likely for supporters up and down the country to see their side go into administration and/or liquidation and for local communities to lose far more than a football club. Unfortunately, we believe that the response of the football authorities has failed to appreciate the urgency of these problems and amounts to little more than a fudge. 6.3 The football authorities’ commitment to “participate in Government expert working groups to review the recognition, rights and responsibilities of supporters’ trusts within the statutory framework” is welcome, but their formation has taken an inordinately long time. The Select Committee should consider whether it is appropriate for the football authorities and the Government to continue stalling on this issue and, if necessary, to state clear and recommended time-scales, since many supporters’ trusts who might be considering investing significant money in their football clubs would benefit from a resolution of issues around the restrictions currently hindering fan investment in the Financial Services and Markets Act (2000), potential tax relief and the precise rights of a supporters’ trust to buy out their club during insolvency. 6.4 The Select Committee report recognised that “a case could be made that, rather than tighter regulation, a more fundamental ownership change is required”. The football authorities have included proposals on club forums, supporter liaison officers and other issues but not addressed the importance of individual clubs adopting formally stronger and structured relationships with their fans. The very fact that these arrangements will be largely left to the discretion of individual leagues or clubs to enforce raises the prospect of several different tiers of engagement with supporters up and down the pyramid. Football should not lose this unique opportunity to enshrine relationships between clubs and supporters into the new licensing framework, offering supporters’ trusts regular and respectful engagement with their football clubs. 6.5 We firmly believe that supporters’ trusts, as democratic representatives of the fans and organisations constituted to deliver tangible community benefit, should have the right to access information about the running of their football clubs, including financial accounts, and be able to meet with club executives. The proposals put forward by the football authorities to require consultation with regard to the moving of a club—or the loss of a ground—are welcome, but come a little too late to offer any consolation to supporters of Wimbledon, who saw their club moved to Milton Keynes and the franchising concept endorsed by the Football League. We would like further information about how supporters will be consulted and listened to during a future scenario, especially as it was only due to the “Back to the Cottage” campaign run by Fulham supporters that our club returned to Craven Cottage after a two-year exile at Queen’s Park Rangers in 2004. 6.6 We believe that it is in the best interests of the game for clubs to forge closer relationships with their supporters. As the Fulham Supporters’ Trust, we have been greatly encouraged by the close links created by regular discussions between members of the Trust Board and club officials over the past six months. Fulham Football Club’s Supporter Liaison Officer, Tommy Guthrie, has been in regular contact with the Trust to discuss any ongoing issues and is a reassuring and approachable presence at all first team fixtures, willing to assist to resolve any problems. The Club have also invited Trust Board members to visit the training ground to meet with members of the Club’s Board, the Chief Executive and other Club officials. This has opened doors and resulted in consultation and frank discussion about future strategy that has been greatly appreciated by both Trust members and Fulham fans. 6.7 The success of supporter ownership was alluded to earlier in our evidence and it is important to note that, despite the widely held belief that successful supporter ownership and engagement is only possible lower down the leagues, many top flight clubs have pursued closer relationships with their supporters’ trusts. Swansea City’s Supporters’ Trust own a significant shareholding of the football club, having helped to rescue the club during their spell in the Football League basement during the 1990s, and their ongoing influence is seen not only in the club’s continuing focus on their local community and commitment to engaging with supporters but also in the welcome that club officials afford visitors to the Liberty Stadium. Arsenal Supporters’ Trust have cobber Pack: U PL: COE1 [E] Processed: [25-01-2013 11:58] Job: 023143 Unit: PG01 Source: /MILES/PKU/INPUT/023143/023143_w022_023143_w025_michelle_FGF 023 - Football Conference.xml

Ev w22 Culture, Media and Sport Committee: Evidence

also been successful in establishing a structured relationship with Arsenal Football Club, which comprises of regular meetings with the Club’s Chief Executive Officer, finance briefings for the Supporters’ Trust, question and answer sessions for Trust members with the Club’s Chief Executive and presentations from marketing, communications and medical executives at the club.

6.8 We believe that engagement with the supporters, who provide much of the financial clout the Premier League wields, is the best way to restore football to good health. The Fulham Supporters’ Trust has recently joined other top flight supporters’ trusts to participate in the newly-formed Premier League Supporters’ Trusts Group set up by Supporters Direct, which meets to discuss issues of mutual concern. The Premier League’s engagement with match-going fans remains minimal and we would encourage the Select Committee to recommend that the Premier League holds regular meetings with members of the Premier League Trusts’ Group as part of the journey towards structured relationships with supporters and the potential setting up of pilot schemes to identify best practice and other ways to engage with fans. To the supporters, the Premier League’s governance arrangements—agreed by the 20 chairmen—make them a modern-day cartel and a closed shop that has embraced commercialism rather than co-operation.

7. Funding of Supporters Direct and other supporters’ bodies

7.1 The Government’s response to the Select Committee’s report underscored its belief “that a solution to provide funding for the long-term future of Supporters Direct and other high-profile supporters’ group representative bodies should not be beyond the skill of the football authorities, working closely with the bodies concerned”.

7.2 The football authorities’ response to this position was particularly curt. They declared that “S[upporters] D[irect] should, as in the normal course of a membership body, primarily rely on funding raised from their membership or their own initiatives”.

7.3 The Select Committee should note that the Premier League withdrew £1.2 million of funding to Supporters Direct from the Football Stadia Improvement Fund in June 2011 in response to Twitter postings made by Supporters Direct’s then Chief Executive Officer, Dave Boyle, after AFC Wimbledon won promotion to the Football League in May 2011. The funding was reinstated in July 2011 and has allowed Supporters Direct to continue to support the more than 180 Supporters’ Trusts who have poured more than £30 million back into football since 2000. The Select Committee should also note that no action has been taken by the Premier League against Sir David Richards, the chairman of the Premier League and a member of the FA Board, following his comments at a March 2012 conference in Qatar.

7.4 The assistance received from Supporters Direct was invaluable during the “Back to the Cottage” campaign to return Fulham to their historic home of Craven Cottage and in setting up the Fulham Supporters’ Trust in 2003. The continued growth of the Fulham Supporters’ Trust in representing the interests of Fulham fans both at a local, Club and national level could not have been achieved without the support and assistance provided by both Supporters Direct and the Football Supporters’ Federation. Whilst we do not currently own or control our football club, 25 supporters’ trusts do so and more than a hundred have a shareholding. More than 300,000 UK residents are members of a supporters’ trust and much of the community and behind-the- scenes work that trusts do on a day-to-day basis goes unreported.

7.5 Supporters Direct are working hard to diversify their funding streams and find ways to achieve further funding from their membership but the intransigence of the football authorities is most regrettable. Given the vast sums of money that the Premier League alone receives through broadcast deals, we believe the football authorities should commit to a funding package that gives Supporters Direct’s laudable domestic work the financial security it deserves.

7.6 The Select Committee should also note that similar financial challenges threaten the ongoing work of the Football Supporters’ Federation (FSF). The FSF’s work with the Fulham Supporters’ Trust, particularly in terms of providing information about foreign cities during Fulham’s recent Europa League campaigns and assisting in tackling overzealous policing and stewarding, is greatly appreciated by the Trust’s members. Furthermore, the structure of the regional divisional meetings helps to provide a forum for local Trusts and supporters’ groups to discuss issues of mutual concern. We note that some regions of the FSF now struggle to function and, in some cases, this is directly down to the refusal of local clubs to co-operate. The FSF’s outstanding “Fans Embassy” service and support to England fans who travel abroad to watch the national side should be commended and we would ask the Select Committee to consider ways in which the football authorities’ could be compelled to offer further forms of financial and administrative support to an organisation that gives so much back to the game. July 2012 cobber Pack: U PL: COE1 [O] Processed: [25-01-2013 11:58] Job: 023143 Unit: PG01 Source: /MILES/PKU/INPUT/023143/023143_w022_023143_w025_michelle_FGF 023 - Football Conference.xml

Culture, Media and Sport Committee: Evidence Ev w23

Written evidence submitted by STAR (Supporters’ Trust at Reading) STAR is pleased to have the opportunity to comment to the Select Committee on the response of the football authorities to the Committee’s recommendations. We should like to set these in context by referring back: — firstly, to a summary of our original submission; and — secondly, to our comments on the Select Committee’s Report published in July 2011 and the Government’s Response in October 2011. Before concluding with our concerns about the football authorities’ response.

(1) STAR’s Original Submission In STAR’s original submission to the Select Committee, we addressed each of the areas to be reviewed and our views were summarised as follows. — In some respects, football clubs should be treated differently from other commercial organisations. — The governance of football in England and Wales is wholly inadequate and the governing bodies which set the rules and apply them are, to varying degrees, ineffectual. — There is far too much debt in the professional game and there often appears to be scant regard for its repayment or the interests of creditors. — The Supporters’ Trust share-holding model has much to commend it. — Government intervention is justified, but it should be restricted to imposing a powerful, independent regulatory regime with two key objectives: (i) To establish a no-nonsense “fit and proper persons” requirement for all club owners, majority shareholders, board members and senior “decision-makers”; and (ii) To ensure that every club’s strategic objectives and financial management are prudentially sound, in order to protect the interests of its employees and all interested third parties, including creditors and other football clubs, particularly those in the same league, as well as supporters. — Professional football has an almost unique role in terms of its relationship with its supporters and local communities, whilst at the same time generating huge revenues and capital injections on an international scale. A unique governance model is required for a unique industry. Self- regulation will never impose the two key objectives set out above. Other aspects of regulation, such as the Laws and Rules of the game and the organisation of the competitions, are best left to the football authorities themselves.

(2) STAR’S View on the Select Committee’s Report and the Government’s Response STAR welcomed the Select Committee’s Report and the Government’s strong, positive response to the Committee’s recommendations, particularly with regard to: 1. The setting up of a football licensing body with appropriate power, skills, accountability and representation; 2. The recognition of the value of the contribution that supporters’ groups make in different ways in the running of their football clubs. In particular, we were pleased that this was reflected in a practical way by the encouragement of the football authorities to provide long-term funding to Supporters Direct and other high-profile supporters group representative bodies; and 3. The commitment to legislate if the football authorities fail to put forward changes that make “a lasting and substantive difference”. It remained our view, however, that, in the absence of a new, powerful, external regulator backed by government legislation, the proposed reforms to the FA Board did not go far enough: a clear majority of truly independent directors, rather than the two proposed, would be a necessary minimum change to enable the FA Board to stand up to the powerful vested interests within the professional game.

(3) STAR’S View on the Proposals of the Football Authorities dated 29 February 2012 After studying the football authorities’ proposals, on 15 March, STAR responded as follows: “The football authorities appear to have done everything they can to confuse: whereas one might have expected each concern within the Select Committee’s report to be addressed in turn, stating exactly what the FA, Premier League and Football League plans are to address it (or reasoned objections if they propose to ignore it), what we actually have is a paper that one might think had arisen almost regardless of the work of the Select Committee and, where it addresses the concerns, it does so only superficially.” cobber Pack: U PL: COE1 [E] Processed: [25-01-2013 11:58] Job: 023143 Unit: PG01 Source: /MILES/PKU/INPUT/023143/023143_w022_023143_w025_michelle_FGF 023 - Football Conference.xml

Ev w24 Culture, Media and Sport Committee: Evidence

“In particular, the issues relating to regulation have only been addressed in the vaguest terms. There is no real acknowledgement that the existing process of self-regulation has failed and nothing that is likely to be truly effective in overriding the powerful vested interests at the top of the professional game to specifically address our two main concerns of ensuring that each professional football club has sound financial management and is owned and run by properly authorised, fit and proper persons. Indeed the proposals would result in even more power for the Premier League (and possibly the Football League) which is the last thing we need, whilst leaving the details as opaque as possible. Even the proposals for the future funding of Supporters Direct effectively defy the prompting by the Select Committee.” “All in all, this is a massive act of defiance by the football authorities with a veneer of compliance; it is hard to see how the government can now refuse to carry out its threat to impose an effective governance regime to ensure that professional football is properly governed in the interests of all stakeholders and for the long-term future of the game, and we would strongly urge them to do so.” Nothing has happened since that date to cause us to reconsider. We are grateful to the Committee for producing an excellent Report and we are pleased that it has the full support of Government. There is manifestly still much to be done to be done, though, in persuading the football authorities to adopt the recommendations, let alone for those changes to be implemented effectively to make a lasting and substantive difference. Footnote: The Committee may be aware that Reading Football Club has undertaken a change of ownership in the period since our original submission. We were not aware of this pending development when our submission was made and it has no bearing on our comments or on this latest submission, nor has the Club’s recent promotion to the Premier League. July 2012

Written evidence submitted by Plymouth Argyle Supporters Society (trading as the Argyle Fans’ Trust) The Plymouth Argyle Supporters Society (trading as the Argyle Fans’ Trust) welcomes the report of the Culture, Media and Sport Committee on Football Governance, as published on 29 July 2011. We also welcome the recommendations on licensing put forward by Supporters Direct (Proposal A). Lower league football clubs are important parts of the identity of their local communities and as such must be protected in the interests of not just supporters but of the towns, cities and regions which they represent. Too many of these clubs have been put into financial difficulty by directors and owners who do not value this attachment, and for various reasons have saddled clubs with huge debts which they have not the means to pay following the departure of said directors or following a decline in the club’s league status. Supporter governance is therefore key, as it strengthens the links between the club and its community whilst guaranteeing that the importance of the club to its communities’ identity is safeguarded by those who recognise this importance and value it more than wealth and prestige. The experience of Plymouth Argyle fans over the past few years has highlighted just how far a club can fall in a very short space of time when directors are not properly accountable to the communities which they serve and the supporters of the club of which they are just temporary custodians. With debts rumoured to be in excess of £17 million, Plymouth Argyle was placed into administration, at which point not only was the club deducted ten points but its very future was put at risk. The directors of the club faded into the background whilst it was the supporters came to the fore to fight for the future of the club. Together, they raised over £100,000 to help the staff who worked on during a lengthy administration period. The fledgling Argyle Fans’ Trust, operating under Model Rules and advice provided by Supporters Direct, gained 1,500 members in a very short period of time, and it was that force that played a key part in the club’s survival, as a new owner was found who both respected the supporters place within the club and the club’s place within the community. Current football governance provided no checks or balances against the debts that were built up by former directors and, like in so many cases, the supporters and staff were the ones left to pick up the pieces alongside a new owner. Had there been better governance, which included supporter scrutiny, the lack of communication over the decisions and risks being taken by our former directors would have been far less likely to have happened. Supporters are the constant, and they are the soul and conscience of a football club; they should be considered as such in terms of governance so that they can help protect vital community assets for future generations. The Trust supports the proposals for licensing put forward by Supporters Direct. We believe that fan engagement with their clubs, to ensure sustainable and community-focused operation, with transparency and accountability at the fore, is key to the future well-being of football. As the Committee’s report states (p.63), clubs must be protected from over-ambitious or otherwise incompetent or duplicitous owners, while good owners much be encouraged to stay in the game. The Supporters Direct proposal for football governance echoes this when it says the framework for sustainable development should promote financial and social responsibility, and ensure that clubs and their assets are protected for current and future generations. The Trust cobber Pack: U PL: COE1 [O] Processed: [25-01-2013 11:59] Job: 023143 Unit: PG01 Source: /MILES/PKU/INPUT/023143/023143_w022_023143_w025_michelle_FGF 023 - Football Conference.xml

Culture, Media and Sport Committee: Evidence Ev w25

supports Supporters Direct’s framework for “Fit and Proper Supporters Trusts” to be granted legal rights towards governance and scrutiny over the clubs they represent, rights which become more powerful through incremental levels as the trust establishes itself, demonstrating its own proper constitution and governance, a strong membership, and community and social engagement.

The Argyle Fans’ Trust believes the current owner of Plymouth Argyle is making genuine moves to significantly improve supporter engagement, following a sustainable operational model, with supporters having a voice, and welcomes these moves. We must however also consider the positions of other clubs, whose owners may not be as open to such engagement, or of our own club should its ownership change at some point in the future. If the football authorities will not act to facilitate the supporter engagement model proposed by Supporters Direct, we believe legislation should be put into place to enforce it. July 2012

Written evidence submitted by Mariners Trust (Grimsby Town supporters trust)

I am writing to you on behalf of Mariners Trust (Grimsby Town supporters trust) regarding the report recently published from the Department of Culture, Media and Sport on Football Governance. It is our firm view that that the report was not anywhere near as far reaching and radical as required for the long term health of our national game and the response from the Football authorities basically paid lip service to the recommendations.

The situation at our club, Grimsby Town, is an interesting case in point in that it is different to other cases you will have read about because we have not been through the crisis that many other clubs have been through mainly because of the fantastic financial commitments made by the directors. Many may argue that we are in fact very lucky in that we have one key individual who has invested significantly in the club by way of both loans and equity and there is absolutely no doubt what so ever that he is a true and passionate fan of the club and has the best interests of the club at heart. Also we have an element of security, which he initiated, in the form of a protocol agreement which prevents loans being called in unless the club are in a position to be able to afford repayment. But therein lies the problem in that we are beholden to one individual.

Not surprisingly given the level of investment all of the decision making and control of the club lies with this one individual. We, the supporters trust, have a 13% stake in the club and are currently seeking a place on the board. We do have a good working relationship with club and have recently achieved significant transparency of the financial information so again this is different from other cases and we have already achieved much of what others are striving for and indeed what many are asking to be made compulsory in the future. We are, however, under no illusions that realistically we don’t have any real influence or power in the running of our club and are unlikely to unless the club was forced to do so as part of a wider directive. We are therefore continually on tenterhooks hoping that one key individual remains faithful and motivated to the cause and doesn’t decide to fall out and send the club into turmoil.

After many years in the Football league, often punching above our weight, we now operate in the Blue Square conference. Our demise started with the collapse of ITV digital which basically took £0.5 million, which was a very significant proportion, from our income stream without prior warning As we now attempt to make our way back up the football pyramid we find inflationary pressure from “smaller” teams who are spending disproportionately backed by wealthy owners and this is certainly having a knock on effect on other clubs who are overstretching themselves in order try and compete.

This cannot be the way to run our game. We urgently need to get to a system where everyone is working to the same set of rules. As system where the rules force clubs to manage their financial affairs in a transparent and correct manner. A system where clubs need a licence to operate which can be removed if the rules are broken. A system that ensures involvement from the lifeblood of the game, the supporters. A system that cannot have the future well being of a club in the hands of one individual. A system that is very different to the way football is run now.

You are in the very privileged position of being able to play in a big part in making radical change and making the game we all love sustainable for future generations. Hopefully the evidence from ourselves and others will help you in your decision making as you arrive at your recommendations. July 2012 cobber Pack: U PL: COE1 [E] Processed: [25-01-2013 11:59] Job: 023143 Unit: PG01 Source: /MILES/PKU/INPUT/023143/023143_w022_023143_w025_michelle_FGF 023 - Football Conference.xml

Ev w26 Culture, Media and Sport Committee: Evidence

Written evidence submitted by Dons Supporters Together DST (Dons Supporters Together) has watched events unfold in Scottish football this summer with increasing concern as the whole Scottish game has been tarnished by the financial collapse of Rangers whereby it has been very evident that men, more concerned with profiteering than the wishes of fans, can put the very existence of a football club at risk. It is with increasing dismay that we have watched Scottish football tear itself apart in its attempts to protect a business model that operates more for the benefit of TV companies and armchair viewers rather than paying supporters. We believe that the new Rangers, if they can satisfy the agreed standards demanded for SFA (Scottish Football Association) and SFL (Scottish Football League) membership, should join in the Third Division, provided they be successful over other applicants for the vacant position in Scottish senior football. This is merely a desire to see the application of the current rule book and this long and protracted saga could have been avoided, had the governing bodies not just applied the appropriate rules, weeks ago. Given our view that sporting integrity is more important than pure financial considerations, we welcomed the “No” vote passed by the SPL (Scottish Premier League), but we have watched with disgust as the SPL clubs have stood silently on the sidelines whilst their own Chief Executive—with the help and approval of a now entirely discredited SFA Chief Executive, has tried to bully and threaten lower division clubs into submission, and the acceptance of ill-thought out plans that are being rushed through for totally spurious reasons. Not only do we find the tactics used by Neil Doncaster and Stewart Regan abhorrent, we also take issue with the doomsday scenarios they have offered as evidence, not least because such scenarios are one- sided with little foundation in reality. Whilst TV money and corporate sponsorship are undoubtedly important we do not believe that all of this income would vanish if the Rangers newco was not guaranteed a place in the SPL within 12 months. We would contend, instead, that greater competition will reverse the trend of declining attendances and bring many more fans through the gate to SPL matches, that will more than compensate for any lost revenue from TV and sponsorship, but no evidence has been produced that this will be the case. Indeed, were it to be the case, then the current role incumbents mentioned above have constituted a complete dereliction of duty. Further, if the current contracts have indeed been agreed on the suggested basis, that they are predicated on the Old Firm clubs being in the SPL, and playing each other four times a season, then these contracts are seriously flawed and major misjudgements on the part of the approving parties, such that we can have no confidence in the abilities of said persons to conduct their duties satisfactorily on behalf of their member clubs. This, however, is an issue that should go beyond finances. It is essential that we have a fair and equitable league structure, with governing bodies that are consistent and reasonable in their treatment of all clubs. We do not believe that is currently the case and so we call on all Supporters Direct to urgently address the damage being done to the game by Neil Doncaster and Stewart Regan. Reconstruction of the league structure is a critical factor in strengthening the Scottish game. The proposals that are currently being discussed destroy the prospect of a strong Scottish game and are aimed solely at building Newco Rangers. These attempts at craven gerrymandering, for the sake of one club, are an affront to all the commitments to “sporting integrity” we have heard over the last few months. It is depressing to hear so many supporters speak of not going back to club or international (Scotland national team) due to their increased disillusionment with Scottish football in recent years and the current saga has significantly increased the potential for more leavers if the wrong decisions are made, that again betray the game’s paying customers. We are aware that many fans of all clubs, and journalists etc, have contacted FIFA and UEFA asking them to intervene and are also aware of other matters that have the potential to open up a legal minefield in the decision making process such as the proposals being against UK competition, and even restriction on trade rules, as well as conflict-of-interest scenarios being evident within Scottish football governance roles. Additionally, we have attached an article that came to DST from some members.3 It was posted on a prominent internet site so you may already be aware of it. Whilst lengthy, the article is an excellent piece of work that clearly calls out the damage that is being done to our game by Regan, Doncaster and to a lesser extent Longmuir, as well as those SPL chairmen complicit in drawing up the injudicious proposals that we hope will be voted down this week. Further, by his actions and words, Mr Regan has seriously compromised the Independent Appellate Tribunal that has yet to meet to determine the sanctions to be applied to Old Rangers, though it is also astonishingly incompetent, and arrogant, of Mr Regan that he has failed to comply with Lord Glennie’s ruling that the decision should be referred back to the appeals committee. Additionally, the separate investigations into Old Rangers by both bodies appear to be being conveniently put to the side at present, such that neither are progressed to the detriment of getting Newco into Div 1. 3 Not printed cobber Pack: U PL: COE1 [O] Processed: [25-01-2013 11:59] Job: 023143 Unit: PG01 Source: /MILES/PKU/INPUT/023143/023143_w022_023143_w025_michelle_FGF 023 - Football Conference.xml

Culture, Media and Sport Committee: Evidence Ev w27

Given that a possible decision by the Tribunal is to suspend Rangers, then we are staggered that this decision has not been determined as it would render the contrived proposals on behalf of Rangers as meaningless, were they to have been suspended from football. Such a decision would actually give the SFA and SPL/SFL at least a year to determine the correct league structure, and all the other changes they propose to make, in a well- thought out way that would increase the chances of the changes being successful.

DST, and fans of all clubs do not intend to stand silently by and let incompetent officials ruin, or kill, the game we all love and DST have written to Supporters Direct to ask them to takes up this matter on behalf of fans of all Scottish clubs. We have also written to the AFC Board of Directors. July 2012

Written evidence submitted by R3, the insolvency trade body

R3 represents 97% of UK Insolvency Practitioners (IPs)—the only professionals authorised to take insolvency cases. As part of their role, Insolvency Practitioners see distressed businesses in a range of different sectors, so are able to comment on the challenges peculiar to football insolvencies from both an administrator perspective and a wider business rescue one. As such, R3’s submission will focus on what happens when a club enters a formal insolvency procedure and specifically the application of the football creditors rule and the implications for the long-term financial health of football clubs and those small businesses trading with them.

Executive Summary — The joint response of the Football Association, Premier League, Football League and National Game does not adequately deal with the problems surrounding the treatment of “football creditors” who are paid in full at the expense of all other unsecured creditors. — R3 believes that the “football creditors rule” is inequitable and contains several anomalies which challenge the argument that the rule is intended to preserve the integrity of the game. It does not protect clubs in England, Scotland and Wales who are owed money by overseas clubs and whilst it covers a player’s contractual obligations, it does not extend to any other employees of the club, including managers and coaching staff. — The football creditors rule challenges the general principle in insolvency that all creditors of the same class should be treated equally. Whilst the recent High Court Judgement of Mr Justice Richards (HMRC (Her Majesty’s Revenue and Customs) v The Football League and FA/Premier League (2012) EWHC 1372) ruled that the football creditors rule did not actually breach insolvency law, there are still questions which must be answered surrounding whether as a matter of policy, the rule is fair and just. — R3 calls for the Government to legislate to remove the football creditors rule, to ensure a level playing field for all creditors and ultimately to help improve governance and financial prudence within football clubs.

Detailed Response

The football creditors rule: an overview

1. The football creditors rule states that if a club undertakes a formal insolvency procedure (usually administration followed by a Company Voluntary Arrangement (CVA)), its membership or share in the football league is suspended. This suspension will not be lifted until certain football creditors of the club have been paid in full. Players’ contractual obligations and other clubs owed money from players they have sold are classified as football creditors; however, other creditors, including suppliers of kit, St John’s Ambulance and HM Revenue & Customs are not. The Football League will only approve a club’s retention of its league share if it pays, as a priority, all of its football creditors or makes arrangements for them to be paid in full, typically through an obligation made by the company which emerges from any CVA.

2. The governing bodies of football advance the argument that the football creditors rule is designed to preserve the integrity of the game and prevent a club from purchasing a player only to then subsequently renege on that debt. They argue that if a club does not fulfil its obligations to another club it puts them at an unfair sporting advantage.

3. Whilst we appreciate this argument, R3 believes that the operation of the football creditors rule has several anomalies and as such does not always preserve the integrity of the game. The football creditors rule ensures that the totality of a player’s contract is paid as a super-priority, yet it does not extend to any other employees, including managers and coaching staff. The rule also ensures that clubs are protected when a member of the FA fails to pay its debts; however, there is no reciprocal football creditors arrangement for overseas clubs that fail to meet their obligations to UK clubs. cobber Pack: U PL: COE1 [E] Processed: [25-01-2013 11:59] Job: 023143 Unit: PG01 Source: /MILES/PKU/INPUT/023143/023143_w022_023143_w025_michelle_FGF 023 - Football Conference.xml

Ev w28 Culture, Media and Sport Committee: Evidence

Is the football creditors rule fair? 4. The treatment of creditors in a football insolvency is unlike that in any other formal insolvency. The general rule of insolvency provides that all creditors of the same class are treated equally and there is a strict hierarchy for paying out purposes, which the Insolvency Practitioner must adhere to when distributing dividends. Typically lenders with security are paid as a priority whilst unsecured creditors, including HMRC and the business community, are paid last. In football club insolvencies, under the football creditors rule, players’ contractual obligations and other clubs owed money from players they have sold are paid as a priority ahead of all others. The cost of meeting this obligation is invariably so significant that it substantially erodes the “pot” of funds available for the unsecured creditors. In addition, the rule also reduces the value of any offer made by a potential purchaser of the club who was obliged to fulfil these financial obligations. 5. In May 2012, Mr Justice Richards ruled that the football creditors rule was legally fair and did not breach two principles of insolvency law, The two principles concerned are those intended: to prevent debtors withholding assets from consideration as part of the insolvency process; and, to ensure all creditors of the same class in insolvency are treated equally when assets are distributed. 6. R3 believes that whilst the rule may have been judged to be legally fair, as a matter of policy it must be considered that the football creditors rule does not provide for a level playing field. Unlike in most insolvency situations, the IP is obliged to restructure a club’s cost base for the principal benefit of the football creditors, rather than the creditors as a whole as in a “normal” insolvency situation. 7. Small businesses are the lifeblood of the UK economy and have been singled out by policy-makers as likely to play an important role in any economic recovery. It would therefore seem counter-productive to create a situation where unsecured creditors, who are typically small businesses, lose out to football creditors, especially as many of the latter are often highly-paid footballers. Indeed, whilst much is made of the importance of football clubs to the local community, local suppliers are often the major unsecured creditors in an insolvency situation (along with HMRC) and consequently suffer the greatest losses. 8. To help ensure that local suppliers and small businesses are offered some protection, R3 believes that such suppliers should be made aware of the football creditors rule and their position in the payment hierarchy so they fully understand the risks involved and can make a better informed decision about doing business with a football club.

Financial model 9. As a general rule, a football club’s financial model is inherently unstable. In their joint response to the Select Committee the Football Association, Premier League, Football League and National Game have highlighted several changes which aim to create a more sustainable economic model for professional football. 10. Whilst this is a step in the right direction, the football creditors rule does little to promote financial discipline amongst member clubs and arguably encourages risk-taking at the expense of ordinary unsecured creditors, as a club knows that there is little risk in selling players to another club on extended credit terms. R3 believes that the underlying issues surrounding the financial management of football clubs would be improved if, alongside these measures, the football creditors rule were abolished. 11. A key problem with the football creditors rule is its effect on the long-term financial health of a club. When a club enters into insolvency and future revenue from broadcasting rights as well as other cash streams are passed through the league and diverted to pay football creditors who have not been paid, it leaves the club drained of vital cash flow in future seasons. Legislating to abolish the football creditors rule would help to ensure football clubs are restructured properly and can turn around their financial situation following an insolvency. 12. R3 also believes that the points deduction rule, which penalises a club for going into administration, does not encourage financial prudence. The threat of a large points deduction and potential relegation inadvertently encourages wrongful trading as clubs continue to avoid taking the difficult decision to go into administration and risk losing points when they are already technically insolvent. Consequently, clubs keep on trading and incur additional debts they cannot pay. This in turn can further losses to unsecured creditors.

Recommendations 13. Following the recent HMRC ruling, Government should take action to legislate against the football creditors rule. 14. Small businesses and other local suppliers should be made aware of the football creditors rule and their position in the payment hierarchy so they can make an informed decision before agreeing to supply credit to a football club. 15. Government should consider whether the points’ deduction rule as it currently stands is conducive to the prudent running of a football club. July 2012 cobber Pack: U PL: COE1 [O] Processed: [25-01-2013 11:59] Job: 023143 Unit: PG01 Source: /MILES/PKU/INPUT/023143/023143_w022_023143_w025_michelle_FGF 023 - Football Conference.xml

Culture, Media and Sport Committee: Evidence Ev w29

Written evidence submitted by the Independent Manchester United Supporters’ Association RESPONSE TO THE FOOTBALL AUTHORITIES’ PROPOSALS FOR GOVERNANCE REFORM Summary of Recommendations — We repeat our call (first made in 20064) for football to be recognised as a cultural activity and for legislation to be introduced to protect it as such. — This legislation should also serve to demonstrate to the Premier League and those owners within that organisation who have shown no respect for our culture, our institutions or even our senior politicians that where self-regulation is abused in the way that it has been then it will be bought to an end. We therefore call for Government intervention to impose: — an FA Board of ten, made up of four independently appointed members and one representative from each of the Premier League, Football League, National Game, Professional Players, Women’s Game and Fans; — the requirement for all companies with ultimate ownership of Premier League football clubs to be UK based and registered at Companies House; and — formula based regulation of the amount of money that can be taken out of each football club to mirror current rules restricting the amount of money that can be put in.

Introduction 1.1 The gist of IMUSA’s previous submission to the Committee was to outline our view that English football is unique because of the cultural heritage that surrounds it. Our major concern remains the failure of Government to recognise football’s value as a cultural asset and to protect it as such. As a result, the cultural value of our game continues to be eroded by financial abuses, corporatisation and moves towards US style franchises. 1.2 The responses we give here to the Football Authorities’ proposals for governance reform are unsurprisingly framed with reference to Manchester United but we intend these to be general points that could be applied to any team in the Premier League and we are sure that the Committee will appreciate that the points we make are not in any sense local or specific to one football club.

Main Issues 2.1 We have read the Football Authorities’ response to the DCMS report with interest but have seen little to assuage our long-standing concerns about: (a) The pernicious influence of the Premier League on the game’s regulators. (b) The lack of transparency and regulation of ownership of our football clubs. (c) The lack of protection against the financial abuse of football clubs. 2.2 These issues are all interrelated and the product of the reshaping of top flight football in this country from an activity aimed primarily towards the attainment of sporting excellence to one that is mainly concerned with income generation. This process has occurred within the space of just 25 years and has been manufactured by those who stood to gain most from it. That is, the Premier League and the owners of the group of “Big Five” clubs that preceded this organisation and initiated its creation.

The Pernicious Influence of the Premier League on the Game’s Regulators 3.1 We see the Football Association as the natural regulator of the game in England, but only once it has been rendered fit for purpose. We regard it as currently being unfit for purpose because of the distorting influence the Premier League has on the FA Board. The DCMS and Football Authorities have seemingly recognised this and taken steps in the right direction but we do not feel that these go far enough. Our recommendations are therefore that the size of the FA Board is set at ten, with four being independently appointed and one representative from each of the Premier League, Football League, National Game, Professional Players, Women’s Game and Fans. 3.2 The required changes to the composition of the FA Board have been not volunteered by the Football Authorities. We therefore call on Government to intervene in this matter and impose these changes.

The Lack of Transparency and Regulation of Ownership of our Football Clubs 4.1 The Committee are doubtless aware that details concerning the ultimate ownership of Manchester United Football Club have not been in the public domain since Red Football LLC was moved to the US state of Delaware. This company is now apparently in the process of being moved to the Cayman Islands where these details will be even more deeply buried. 4 Reclaim the Game www.imusa.org/newsarticle.php?id=15 cobber Pack: U PL: COE1 [E] Processed: [25-01-2013 11:59] Job: 023143 Unit: PG01 Source: /MILES/PKU/INPUT/023143/023143_w022_023143_w025_michelle_FGF 023 - Football Conference.xml

Ev w30 Culture, Media and Sport Committee: Evidence

4.2 There is in consequence no way of independently confirming who actually owns Manchester United.

4.3 This has clear implications for the application of any “Fit and Proper Person’s Test” (FPPT) or equivalent and makes UEFA’s rules to do with owners/companies having a significant interest in only one football club impossible to enforce.

4.4 We are further deeply concerned that both the Football Association5 and Minister for Sport and the Olympics, Hugh Robertson6 referred us to the Premier League for answers to our questions regarding the ownership of Manchester United.

4.5 The Premier League failed to give us a satisfactory response to this seemingly very simple question7 and apparently expected us to trust that they knew, even though they wouldn’t tell us how they knew or show us any evidence to support their claim to this knowledge.

4.6 The Premier League are in any case “ownership neutral”. That is, owners in this league have a completely free hand in the way they choose to run their clubs and there can be no more frank admission that ownership of Premier League football clubs is de facto completely unregulated.

4.7 It is also clear that the authorities that should have been taking an interest in this have handed over their responsibilities in this context to the Premier League.

4.8 IMUSA has been calling for complete transparency of ownership and for those claiming to be owners not to be ratified as such until this has been independently and publicly verified,8 since this is the only way to ensure that FPPTs and UEFA regulations are properly enforced.

4.9 No mechanism to ensure transparency of ownership has been put forward by the Football Authorities. Hugh Robertson has commented that “It’s patently absurd that people save up every week to go through the turnstiles and cannot find out who owns the club”. We agree with this sentiment and therefore call on Government to intervene in this matter and impose a requirement for all companies with ultimate ownership of Premier League football clubs to be UK based and registered at Companies House.

The Lack of Protection Against the Financial Abuse of Football Clubs

5.1 Until the mid-1980’s financial control over the amount of money that could be taken out of football clubs was regulated by FA Rule 34. This prevented owners of football clubs from deriving their sole income from that ownership or from taking a dividend of more than 5% of the face value of the shares they owned. There was also a clause that prevented owners from buying clubs just to asset strip them.

5.2 This rule was put in place because the Founding Fathers of football foresaw the potential of greed to destroy the spirit of the game. FA Rule 34 was the mechanism by which they ensured it remained solely about the attainment of sporting excellence and the rule fulfilled this role for more than 100 years.

5.3 The means used to get round Rule 34 was the holding company model. The rule was written in terms of personal ownership and so technically didn’t apply to ownership by companies. It should have been a relatively simple step for the FA to close this loophole. They did not do so and so took their first step down the road towards the loss of autonomy that is now a matter of such concern to IMUSA and the DCMS Committee.

5.4 English football now finds itself in exactly the opposite situation it was in 25 years ago. That is whilst there are now strict controls over the amount of money that can be put into the game of football there is no longer any regulation over the amount that can be taken out.

Manchester United: A Case History

5.5 Lack of regulation has enabled the Glazer family to siphon out over half a billion pounds from Manchester United since 2005. They have also left this previously debt free club with commitments to repay and/or service another half a billion pounds worth of debt on top of that.

5.6 Ownership details of Manchester United’s holding company have been taken out of the public domain, firstly by registering the company in the US state of Delaware and then lately in the Cayman Islands.

5.7 The club is now distanced from the local community it is based in and is a blight on, rather than an asset to, that community. The club’s traditions and culture have been disregarded. The Glazers have refused to engage with IMUSA even when requested to do so by a Minister of Sport.9 5 Who owns Manchester United? The FA replies www.imusa.org/newsarticle.php?id=323 6 Who owns Manchester United? The Sports Minister replies www.imusa.orginewsarticle.php?id=326 7 Who owns Manchester United? The PL replies www.imusa.org/newsarticle.php?id=325 8 No ratification without independent verification www.imusa.org/newsarticle.php?id=327 9 United fans claim Caborn snub www.imusa.org/newsarticle.php?id=21 cobber Pack: U PL: COE1 [O] Processed: [25-01-2013 11:59] Job: 023143 Unit: PG01 Source: /MILES/PKU/INPUT/023143/023143_w022_023143_w025_michelle_FGF 023 - Football Conference.xml

Culture, Media and Sport Committee: Evidence Ev w31

Financial Abuse as an Indicator of other Bad Practices 5.8 The Glazers and the many other examples of where football clubs have been financially abused show that there is clearly a very close association between this and owners failing to respect other aspects of the game. These include those unwritten regulations (c.f. Richard Caborn’s welcoming speech to Malcolm Glazer explaining to him his duties to the local community, the fans and the England team) that owners are not legally obliged to comply with. 5.9 There is therefore a strong case to be made for the strong regulation of our national game, including the reinstatement of controls over the amount of money that can be taken out of it (ie a modern equivalent of Rule 34). The haemorrhaging of such huge amounts of money out of the game can only be damaging to it. Thus, any regulation placing restrictions on this can only be good. 5.10 We therefore call on Government to intervene in this matter and to impose regulations to control the amount of money that can be taken out of football. These should mirror and be at least as strict as those regulating the amounts of money that can be put in.

Summary of Recommendations 6.1 We repeat our call (first made in 200610) for football to be recognised as a cultural activity and for legislation to be introduced to protect it as such. 6.2 This legislation should also serve to demonstrate to the Premier League and those owners within that organisation who have shown no respect for our culture, our institutions or even our senior politicians that where self-regulation is abused in the way that it has been then it will be bought to an end. 6.3 We therefore call for Government intervention to impose: 6.3.1 an FA Board of ten, made up of 4 independently appointed members and one representative from each of the Premier League, Football League, National Game, Professional Players, Women’s Game and Fans; 6.3.2 the requirement for all companies with ultimate ownership of Premier League football clubs to be UK based and registered at Companies House; and 6.3.3 formula based regulation of the amount of money that can be taken out of each football club to mirror current rules restricting the amount of money that can be put in. July 2012

Written evidence submitted by Steve Lawrence Introduction 1.1 Thank you for your invitation to respond with further evidence to the Committee in respect of the response of the football authorities to the Department of Culture, Media and Sport (DCMS) Report on Football Governance. 1.2 It is disappointing that individual responses were not made to the Committee by The FA (Football Association), The Premier League and The Football league. Individual responses might have revealed much about the dysfunction which is derived from the relationship between the three organisations. 1.3 English football has chosen a structure of multiple organisations for football governance and any strategy for reform has to work within that framework. 1.4 Any strategy must also encompass the essential differences between the separate hierarchies of “paid football” (the professional game) and “un-paid football” (the amateur and youth game). Like an iceberg the small peak of professional football sits atop a vast unseen substructure of the unpaid game.

Paid Football—The Professional Game 2.1 English football has developed to a point where The Premier League and The Football League have principal responsibility for the professional game and the Football Association and The Football Foundation have principal responsibility for the amateur game. 2.2 The joint response identifies The Premier League and The Football League as being successful organisations. 2.3 Whilst this is true the relationship between them is asymmetric with a continual migration of broadcast rights revenue towards the peak and a consequential weakening lower down. 10 Reclaim the Game www.imusa.org/newsarticle.php?id=15 cobber Pack: U PL: COE1 [E] Processed: [25-01-2013 11:59] Job: 023143 Unit: PG01 Source: /MILES/PKU/INPUT/023143/023143_w022_023143_w025_michelle_FGF 023 - Football Conference.xml

Ev w32 Culture, Media and Sport Committee: Evidence

2.4 A new Compact between the two, designed to strengthen the structure and redistribute funding lower down the hierarchy might be considered by the Committee whilst at the same time giving them joint responsibility for the creation of a new licensing framework for professional football. 2.5 The new Compact would encompass the interests of a broad spectrum of stakeholders including those with a social or community purpose including supporters groups. 2.6 Furthermore the new Compact could define a range of appropriate and acceptable ownership structures for professional football clubs. 2.7 Limiting the involvement of The FA in these aspects of professional football will allow The FA to direct its attention more adequately to the national representative teams and the governance of un-paid amateur football.

Unpaid Football—The Amateur Game—Administration 3.1 Un-paid football includes all football which is played on an amateur or community basis and where the remuneration of participants does not exceed the extent of out of pocket expenses. 3.2 The amateur game is properly the responsibility of The FA which should have total control over a well defined structure. 3.3 It includes ALL youth football under the age of 16 even where that football takes place under the jurisdiction of professional clubs. 3.4 A comprehensive plan for the structure and administration of the amateur game is essential and where control has been ceded it should be regained. It should include a policy for managing the transition of players from unpaid football to paid football predicated on the best interests of the player’s development and education. 3.5 All youth football should be administrated by The FA within a single unified competition hierarchy on a regional basis. It is a significant responsibility with 1.5m youth players regularly involved and it should include all football played within Academies and Centres of Excellence.

Unpaid Football—The Amateur Game—Infrastructure 4.1 The Football Foundation has over the last ten years acquired a significant responsibility for football infrastructure. Its operations are open to scrutiny and the principal difficulty it faces is a lack of financial resources. 4.2 The Committee might examine ways of endowing The Football Foundation so that it can be independent of The Premier League, The FA and Sport England. 4.3 One possibility would be to enact a formal levy on The Premier League in respect of receipts for global broadcast rights along the lines of the 5% promised by Lord Pendry in The Football Foundation’s first Annual Report in 2001. This giving back of money to the grassroots represents a virtuous circle whereby the top of the professional hierarchy recognises in a tangible way that its very existence is predicated on the health of the grassroots.

The Football Association—Restructuring 5.1 The joint response identifies the need to constitute a new National (amateur/unpaid) Game Board and a new Professional Game Board and the proposition is that they be constituted under the auspices of The FA. 5.2 The same end might be more efficiently achieved by the division of The FA into three separate constituent parts as follows: (1) The FA Professional Game Administration—a pared down version of the existing FA with a well-organised board and with responsibility for over-arching governance. It would also be responsible for organising the England representative teams and it would have the responsibility for coaching education from UEFA B to UEFA Pro Diploma level nationwide. This administration would regulate the playing of the professional game from a position of independence and continue representation on UEFA and FIFA. It would be wholly responsible for independently regulating football club and player agency and would sustain a player transfer database along with a national participation database. Importantly it would be charged with developing a strategic vision for football and for catalysing change. Many of the administrative roles would be fee generating however, in recognition of its strategic role and to ensure continuing independence, government would need to guarantee revenue funding. (2) The FA Amateur Game Administration—a new Civic Society Institution predicated on multiple individual and club memberships and charged with responsibility for the organisation of un- paid/amateur and youth football. It would also oversee regulation of the un-paid game along with the restructuring of the County Associations into larger regions. It would retain responsibility for refereeing and referee education and play a partial role in structuring coach education at grassroots level up to UEFA B level including within schools and universities and cobber Pack: U PL: COE1 [O] Processed: [25-01-2013 11:59] Job: 023143 Unit: PG01 Source: /MILES/PKU/INPUT/023143/023143_w022_023143_w025_michelle_FGF 023 - Football Conference.xml

Culture, Media and Sport Committee: Evidence Ev w33

liaising with the English Schools’ Football Association (ESFA) and the Independent Schools Football Association (ISFA). Most importantly it would be charged with engaging with government in the establishment of a sector of amateur football clubs which own and manage their own facilities, including wholly owned land and buildings acquired from local authorities and other institutional owners. The FA Amateur Game Administration could be funded by memberships at the grassroots with matching revenue from The Treasury out of the tax-take from the professional game. (3) FA Commercial Property Holdings—a conventional facilities management company owning Wembley and St. Georges Park and any other commercial properties including The FA Cup Competition. A subsidiary company already exists and it could be floated off allowing for private investment.

Conclusion 6.1 Strategic changes such as these will face great resistance but they are the kind of changes which are necessary—fiddling at the margins will not suffice. 6.2 In my earlier submission I suggested a “Sport Act”. Perhaps a Green Paper on “Sport in the United Kingdom” with the ambition of bringing forward a “Sport Act” to include legislative changes to “Football Governance” might be an appropriate next step. July 2012

Written evidence submitted by the Arsenal Supporters’ Trust and Arsenal Fanshare The Arsenal Supporters’ Trust (AST) and Arsenal Fanshare Scheme provided written evidence11 and presented to the Select Committee at Emirates Stadium during its previous inquiry. We are grateful to the Committee for highlighting the work of the AST and the success of the Arsenal Fanshare Scheme during this inquiry and in its final report. Arsenal Fanshare has also received praise and support from many others including the FA, Supporters’ Direct, UEFA, the Premier League and the Minister for Sport. In this follow up submission, which complements the AST’s previous evidence, we wish to focus briefly on three key issues which the AST hopes the Committee will raise in its oral evidence session on 17 July and in any subsequent report it produces: 1. To urge DCMS to expedite the expert working group it promised it would establish, working with the Treasury and BIS, to address legislative barriers to supporter ownership including amending the Financial Services and Markets Act 2000. This was a recommendation your Committee made and it is disappointing that this still hasn’t happened given the Coalition Government’s commitment to act on supporter ownership issues. 2. To encourage the football authorities to build on the welcome proposals they have made to create structured relationships between Supporters’ Trusts, clubs and the leagues themselves and to include in these measures specific arrangements to replicate in all relationships the arrangements that Trusts that are fortunate to hold an equity stake already receive—notably access to financial reporting and opportunities to engage with the club’s directors. The AST has already had constructive meetings with the Premier League and the Supporters’ Direct Premier League Trusts Group on this issue and looks forward to further developing the ideas set out in more detail in our initial submission to you. 3. To reiterate the support it gave to the Arsenal Fanshare scheme during its last inquiry and to urge Arsenal majority owner Stan Kroenke to make a very small amount of new equity available to the scheme, which currently faces an uncertain future due to illiquidity in the share market as a result of actions taken during the takeover. This includes asking FA Chairman David Bernstein and Sports Minister Hugh Robertson to make direct contact with Mr Kroenke on this matter. The Minister did commit to doing this during your last oral evidence sessions in response to a proposal by Mr Whittingdale, but to date we do not believe he has been able to do so. The Arsenal Fanshare scheme has been a great success and has given more than 2,000 additional supporters the chance to be involved in ownership of their club with almost £1m of equity in Arsenal. The AST was disappointed that during Stan Kroenke’s takeover no specific mention or provision was made for the Fanshare Scheme and the role of supporters in the equity structure of the club despite our efforts to secure this recognition. This seemed to run against the messages of custodianship and the importance of supporters that were being stressed as key considerations by the Arsenal Board and Stan Kroenke at the time. 11 Not printed cobber Pack: U PL: COE1 [E] Processed: [25-01-2013 11:59] Job: 023143 Unit: PG01 Source: /MILES/PKU/INPUT/023143/023143_w022_023143_w025_michelle_FGF 023 - Football Conference.xml

Ev w34 Culture, Media and Sport Committee: Evidence

All we are requesting is that Stan Kroenke and the Arsenal Board agree to the placement of a small number of new shares. This would mean a specific number of new shares being created and ring-fenced solely for issue to the Arsenal Fanshare scheme. In recognition of Arsenal’s recent 125th anniversary, we have asked for 125 new shares that we believe would secure the scheme’s future for at least three years. 125 shares is just 0.20% of the issued capital and so would have no practical impact on the overall holding and majority of Stan Kroenke. We thank the Select Committee for its interest in this subject. July 2012

Written evidence submitted by Blake Welton, Editor, First e11even 1. With the Culture Media & Sport Committee Football Governance Report finalised in July 2011 and an official response from the Football Association published soon after, it is an appropriate time to attempt to redress some of the issues and questions that remain unanswered on this increasingly dire matter of Football Governance. 2. Since the report we have seen Portsmouth re-enter Administration; Plymouth Argyle, Darlington and Port Vale enter Administration; Coventry City, Birmingham City and Kettering Town struggle to deal with their financial accounts and Rushden & Diamonds liquidated. 3. Further afield is the well-publicised plight of Glasgow Rangers who, despite being north of the border, will have repercussions for the rest of the British footballing landscape. 4. I, like numerous other individuals, groups and representatives, contributed to the Football Governance Report by written submission and I am sure I speak not only for myself but the majority in saying that the current situation has worsened with the urgency and direction from governing bodies alarmingly slow. 5. Arguably the Culture Media & Sport Committee’s examination into Football Governance too often stated the obvious in an overly-long and drawn out process that shed little new evidence in what many working in and around the football sector didn’t already know. 6. Furthermore, one principle ethos of the investigation “to support the co-operative ownership of football clubs by supporters” and “look at the scope for enhancing supporter involvement in decision-making processes” seemed to be lost in exploring the overall failure, incompetence and ineptitude of the current system as it stands. 7. Similarly, it was interesting that Supporters Groups merely provided written evidence to the proceedings, allowing a majority of the usual tired old faces to have egos massaged and old messages rehashed. 8. The state of the nation’s beloved game was, and is, no time for egos and I would have preferred a more prominent role for Supporters Groups either in the form of oral evidence or being actively present on the committee for the duration of the investigation. 9. The fact it is the ordinary football fan who continually foots the bill for the mis-management of a football club either directly (by loyal supporters bailing them out) or indirectly (via Her Majesty’s Revenue and Customs (HMRC) being abandoned in place of outdated and archaic footballing philanthropy) was not underlined as greatly as it should have been. 10. The football supporter is an unusual and rare breed of customer whose loyalty, passion and devotion are still being ignored yet exploited by “the beautiful game”. 11. Yet despite these failings, even the Football Governance concurred urgent reforms were needed. 12. However it is of great interest as to how many of these recommendations the Football Association are actually prepared to “see the course” in light of the tepid response published by the Football Association on 29 February 2012. 13. One fundamental issued raised from the Report was the attempt at abolishing the archaic football creditors rule. 14. Certainly the proposal of the Football Licensing was a step in the right direction but it is clear the Football Association could not have this reform without a reform of the football creditors rule with the High Court rejection of this in May 2012 severely damaging progress. 15. Although the Rt. Hon Damian Collins from the House of Commons’ Culture Media and Sport Committee Select vowed to push to legislate the removal of the rule, I would like to know what the current situation is and the contingencies in place should this removal not be possible. 16. Similarly, I would like to know what the Football Association are prepared to do to remove numerous bureaucratic hurdles supporters face when attempting to save their clubs from the brink of extinction. 17. Furthermore, I continue to question how communication with Supporters Clubs has improved in the past 12 months—not just on a national level but at local level and what enforcements are to be implemented to ensure clubs acknowledge fans’ views. cobber Pack: U PL: COE1 [O] Processed: [25-01-2013 11:59] Job: 023143 Unit: PG01 Source: /MILES/PKU/INPUT/023143/023143_w022_023143_w025_michelle_FGF 023 - Football Conference.xml

Culture, Media and Sport Committee: Evidence Ev w35

18. Certainly when I wrote to Members of the Culture Media Sport Department; Mr. Clarke, Chairman of the Football Supporters Federation; Mr. Burgess, Acting Chief Executive of Supporters Direct and Mr. Bernstein, Chairman of the Football Association back in March 2012 with my concerns, I received correspondence from all, except the latter. 19. I find it incongruous that the Football Association, an organisation spending the majority of its time on campaigns of RESPECT, could themselves be so devoid of any of the very same quality it is so quick to champion, especially when approached with legitimate and genuine concerns from a “member” it is supposed to serve. 20. Furthermore, I understand contingencies are in place to “rebalance the FA Board” and, with this in mind, I would like to see more representatives from Supporters Groups on both the Board and Council and would ask whether this is something the Football Association is currently looking into. 21. At the time of writing, these fundamental issues have not been correctly addressed whilst the majority of other core essential concerns have been dismissed as being outside the Football Association remit. 22. If the section defined as “Matters outside the scope of the FA” is supposedly out of the FA’s remit, according to their initial response, then where is the overriding control and point of contact for serious exploitative issues and concerns. 23. Perhaps with the Football Association quick to deflect responsibility in these key areas (such as issues of ticket pricing) then perhaps it is time for government intervention here. 24. Certainly when average ticket prices for non-league Conference Football are a minimum of £14 it is evident not only are these clubs heavily over-reliant on supporter income streams but ticket-price greed is just as prevalent at the bottom of the pyramid as it is at the much publicised top. 25. Without anything being done for these such “Matters outside the scope of the FA”, there is a collision course for disaster, the equivalent of a car, without a driver heading for the rocks below the cliff, where there is a great deal of consternation expressed but where no-one comes out with any great deal of credibility due to inactivity. 26. It is about time egos and self-preservation at the Football Association are set aside and commonsense prevails for the good of the game. 27. My experience of this Governance Report so far though suggests the establishment charged with governing football within this country has merely given empty platitudes. Now is the time for greater assurances as well as greater supporter inclusion at the forefront of policy-making so perhaps the state of “the beautiful game” can be salvaged for the greater good of the many, rather than the few. 28. Otherwise we will be left with a myopic, self-serving, self-interested ugly monster of our own creating. July 2012

Written evidence submitted by The Football Conference The Football Conference is pleased to have the opportunity to submit follow-up evidence to the Select Committee relating to its report on football governance. We welcomed the Select Committee’s recommendation in paragraph 54 that there should be two national game representatives on a restructured FA Board, “one of whom should be able to represent the non-League football pyramid”. We would argue, however, before that recommendation could be implemented it would be necessary for an Alliance Game Board to be established as part of The Football Association, in order to represent the semi- professional clubs and to provide for one of their number to be elected. In our evidence to the committee’s original inquiry (both written and oral), we strongly argued the case for the establishment of such an entity, in order to represent the interests of the 266 semi-professional clubs which cover Steps One to Four. All these clubs take part in The FA Trophy competition, and represent The FA through the England C international team. Representation of semi-professional football within the governing body has long been the subject of debate, and frustration. We accept the interests of our clubs are different from those in the Premiership and the Football League’s Championship. The Professional Game Board is, therefore, not an appropriate home for the great majority of semi-professional clubs. Equally, there is a world of difference between our semi-professional players and the recreational footballers whose clubs and leagues are catered for by The FA’s National Game Board. The only sensible solution therefore is the establishment of an Alliance Game Board, with its own representative on The FA Board. We hope such a recommendation would be contained in any further report from the Select Committee on football governance. cobber Pack: U PL: COE1 [E] Processed: [25-01-2013 11:59] Job: 023143 Unit: PG01 Source: /MILES/PKU/INPUT/023143/023143_w022_023143_w025_michelle_FGF 023 - Football Conference.xml

Ev w36 Culture, Media and Sport Committee: Evidence

The Football Creditors Rule We also wish to comment on the section of the select committee’s report on “The Football Creditors Rule” (paragraphs 97–107). In our oral evidence on 5 April 2011 (Questions 704 and 705), our chairman Brian Lee and General Manager Dennis Strudwick, made it clear the Conference does not believe that football creditors should enjoy preferential status. It operates a rigorous Financial Reporting Initiative which is aimed at ensuring all member clubs live within their means, and pay all their debts (not just those owed within football). Sanctions are in place to deal with those which transgress. Accordingly we respectfully suggest the Select Committee’s comment in paragraph 107 that “The FA, Leagues and clubs all appeared defensive and uncomfortable about the Football Creditors Rule” cannot apply to the Football Conference. We support the Select Committee’s recommendation that it be abolished. August 2012

Printed in the United Kingdom by The Stationery Office Limited 01/2013 023143 19585